How Do I Rebuild My Credit After Insolvency?

Personal insolvency is likely to have a negative impact on your credit rating. After you’ve gone through an insolvency case and got your finances back on track, the next step towards financial recovery and security is to rebuild your credit score. A strong credit score is essential for getting credit and loans in the future, affecting your ability to get a mortgage, get an overdraft, open a credit card or lease a car. Rebuilding your credit score after insolvency is possible, so we’ve put together a few tips that can help you to get back on the right path! 

Check your credit report

Checking your credit report is essential after bankruptcy, both to work out where you stand and to confirm that all of the information is correct. If you don’t know the full picture for your credit rating, how can you start to improve it? Make sure you have all of your information and we can help you to progress! 

Create a realistic budget

By creating a budget, you can get a better idea of your monthly income and outgoings. Breaking down your spending into non-negotiable payments such as rent, mortgage, bills and debt repayments then shows you your disposable income that can then be more freely spent and saved. Going through your bank statements to see your past spending patterns can also be a great way to discover places that you can save! This is also a good time to consider any opportunities that could increase your income. 

Create a savings account

In an ideal world, you should be allocating 5-10% of your income to savings. This can help to protect you against unexpected expenses such as a car repair or vet bill and prevent you resorting to payday loans or further credit cards. Having savings can also help with avoiding overspending at times like Christmas and gives you a cushion to ensure that your bills and debts are still paid on time when faced with unexpected expenditures. 

Ensure prompt repayments

Your credit score is a measurement of your ability to pay debts on time and in full. If you set up payment plans – whether for a credit card, utility bill or phone contract – it is essential that you keep up with your payments in full. This will gradually build your credit score and reputation as a reliable person to lend money to. The key to building your credit rating is to be 100% sure that you can keep up with the payments you agree to. Focus on building your income and allocating your funds responsibly to get to a position of financial security. 

Contact Exodus Insolvency today

We are experts in financial management and credit. If you are struggling after insolvency, contact us today for impartial and comprehensive advice and support to find your best path forwards. Our team of dedicated experts are happy to support you and look forward to helping you.