Bankruptcy is recorded on your credit file for 6 years. However there are things you can do to improve your credit rating as soon as you are discharged.
Included in this article:
- When is bankruptcy removed from your Credit File?
- Review Default Notices and CCJs
- Change the status of your Accounts
- Start using a credit repair credit card
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When is Bankruptcy removed from your Credit File?
If you go Bankrupt a record is added to your credit file. It will remain there for six years from the date you went Bankrupt. There is nothing you can do to reduce this time period.
On the sixth year anniversary of the start date the record is removed. You do not have to contact the credit reference agencies to remind them. It happens automatically.
Your credit rating will continue to be negatively affected during the time the record stays on your file. Nevertheless there are certain things that you can do to start improving it as soon as you are discharged.
Review Default Notices and CCJs on your Credit File
After you go Bankrupt your creditors should no longer issue default notices or a CCJ (County Court Judgment) against you. However some of them may still manage to do so.
Default Notices or a CCJ are recorded on your credit file for 6 years from their start date. As such if they are issued after your bankruptcy they will continue to have a negative impact on your credit rating even after bankruptcy is removed.
You can identify this problem by reviewing your credit file. If it exists you can ask the lender to amend the date so that it matches the start date of your bankruptcy. You should write a letter to the lender’s Data Controller requesting the change.
If you would like a template letter which can be sent to Data Controllers please contact us. We will e-mail it to you.
You should give the lender 28 days to comply. If they refuse you can escalate your complaint to the Information Commissioner. They have the power to force the lender to make the relevant changes.
Change the status of your Accounts
After you are discharged any lenders included in your Bankruptcy should update the status of your account. They should mark it as “partially satisfied” or “partially settled” to show you no longer owe them money.
You can identify whether this has happened from your credit file. If it has not you should send a letter to the creditor’s data controller requesting the change.
If the change has not been made after 28 days you can escalate to the Information Commissioner as described above.
Start using a credit repair credit card
After the record of Bankruptcy has dropped off your credit file, main stream lenders may still be reluctant to lend to you. This is because you do not have any positive history of borrowing on your file.
No positive credit history is just as bad as having a poor history. Lenders have no idea about whether you are going to be a good lending risk or not. You can only overcome this problem by building up a new history of using credit responsibly.
A good way to do this is to use a “credit repair credit card”. These are available to people with poor credit records or no credit histories.
Using this type of credit for small purchases will start to build up a positive history of credit usage on your file. But remember, it is vital that you repay the balance in full each month. The availability of unused credit is a key indicator that you are a good credit risk and will help build back your credit score (as well as ensuring you do not pay high interest charges).
Some credit repair credit card providers that Beat My Debt are aware of include Vanquis, Aqua and Capital One.
The interest charged by credit repair card lenders is very high. Make sure that you pay off the balance in full at the end of each month. This will help provide evidence of responsible credit usage.
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