How does bankruptcy impact your credit rating?

Your bankruptcy will be visible on your credit report and make it difficult to obtain credit. Before you’re discharged from bankruptcy, it’s an offence to apply for credit of £500 or more without declaring it to the lender.

Bankruptcy will usually stay on your credit report for six years. It may be longer if the bankruptcy is extended for any reason. After this period, it will no longer be listed on your credit file, so you’ll be able to start building up your credit rating again. Some lenders may still ask if you’ve ever been made bankrupt, and you must answer truthfully, even if the bankruptcy is no longer visible on your file.

We would recommend waiting until your bankruptcy has been completely removed from your file before applying for more credit. This is because lenders will be unlikely to approve you whilst you are listed as bankrupt, and if you’re refused credit, this will have a further negative impact on your credit rating.

Before applying for bankruptcy, it’s a good idea to consider how the ongoing impact on your credit file may affect you, your family and your employment. There are a number of alternative debt solutions that may be better for you such as an Individual Voluntary Arrangement or a Debt Management Plan.

If you would like expert, impartial advice about bankruptcy and other debt solutions, call PayPlan FREE on 0800 316 1833 or complete our simple online form and we will call you back.

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