5 Steps to Repair Credit After Bankruptcy in London

5 Steps to Repair Credit After Bankruptcy in London

Posted on August 6, 2021

We have had a couple of clients who are recovering from bankruptcy over the past week in our dealerships. It’s one of those situations that has changed considerably over the past few years and it seems not enough people know how to come repair credit after bankruptcy, enough to qualify for an auto loan.

We asked our London auto loans team to provide 5 tips to repair credit after bankruptcy enough to qualify for a car loan. This is what they came up with.

1.   Start afresh with a new bank account

If you still have your old bank account, this is an optional step but we think now would be good time for a fresh start.

Open a new bank account with the ability to make automatic payments. If it has a savings account and a credit card option too, get those as well.

There are lots of bank account options for people in your situation so shop around to get the best features or deal.

2.   Set up automatic payments

Switch any automatic payments from your old account to your new one so you never miss a payment. Make sure all your outgoings are covered by automatic payments.

If you have some that don’t support them, make a calendar entry on your phone or computer to make sure you never miss a payment.

Paying on time is a critical factor in rebuilding credit so this is essential.

3.   Use a credit card regularly

If your new bank account has a credit card option, use it for everyday purchases. If it doesn’t, apply for a secured credit card if you have to or a standard card if you can.

Use it for gas, groceries and regular purchases. Set up the automatic payment for the minimum amount but clear it each month so you don’t carry debt or have to pay interest.

Using a card will widen your credit mix, open up your credit utilization ratio and begin building that all-important payment history.

4.   Add another card if you can manage one

If you’re paying off your main credit card in full each month, consider taking out another and doing the same. Only do this if you’re clearing the main card though.

If you’re having trouble with spending or clearing, don’t get another card.

5.   Live within your means

We know living within your means is much easier said than done but it’s critical to survive bankruptcy. If you’re to be able to access credit again, you need to demonstrate you have made the necessary changes to your lifestyle and are now in full control of your finances.

Living within your means and not getting into any more debt is a key part of that.

Once you have followed these tips for 6-12 months, your credit score should have recovered enough for you to qualify for an auto loan, which will also help rebuild your credit.

When that time comes, contact our team and we’ll be happy to help.

Contact Unique Chrysler for help, advice and competitive London car finance and leasing.

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