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Credit repair after bankruptcy

How to repair your credit after bankruptcy and get your finances back on track.

If you've declared bankruptcy or are a discharged bankrupt, there are some steps you can take to improve your credit history. Bankruptcy remains on your credit report for up to seven years, so you can set short and long-term goals to get your finances back in order. If you've been discharged from bankruptcy, whether you can apply for a credit card will depend on your credit score and other factors.

From growing your savings to improving your repayment behaviour, you can use this guide to discover how you can improve your credit during and after your bankruptcy.

How to repair your credit after bankruptcy

By following the positive financial steps below, you can start to improve your credit position after bankruptcy:

  • Work on your employment circumstances. The financial security that comes from having stable employment can improve your credit rating and shows lenders that you have a regular source of income. A permanent or ongoing job will also help your overall financial circumstances, so it is a great first step to take.
  • Grow your savings. Savings can demonstrate to lenders that you have the ability to financially manage your finances. Start by regularly putting money aside, even if it is just a small amount that you transfer to a dedicated savings account. You can also use finder's guide to budgeting to get started.
  • Consider getting a term deposit. If you have a lump sum of money you can put into a term deposit account, you may be able to use it to get a secure loan that will help re-establish your credit accounts. You can learn how they work and compare our options in finder's comprehensive guide to term deposits.
  • Limit your credit applications. Too many credit applications can negatively affect your credit history. Even if you've been discharged from bankruptcy, it’s important to be selective about the types of credit you apply for to increase your chances of approval. If possible, only apply for one product at a time and look for options that are likely to be approved, such as secured loans, options with a guarantor or joint accounts. You should also wait until you've built up your credit score before you apply for any lines of credit. Otherwise, any rejected applications could further hurt your credit score.
  • Make payments on time. Whether you have a secured loan or an electricity account in your name, paying the balance on time will help you build up good credit history after bankruptcy.
  • Talk to issuers. If you want to apply for a particular product after bankruptcy or learn what options are available, consider contacting banks and other lenders to discuss your situation. They will be able to advise you on your eligibility and answer any specific questions that you have to help you find options that will work for you.

The credit repair process takes time, but each positive behaviour will have a good impact on your credit file. You can check out finder's guide to credit repair for more tips.

Is it worth contacting a credit repair agency after bankruptcy?

If you've found any incorrect negative listings or black marks on your file, you can enlist the help of a professional credit repair agency to have those listings removed. However, these credit repair agencies may be able to do little for you after bankruptcy.

In fact, the government’s MoneySmart website warns people to be wary of these companies as they “may not always be able to do what they claim”. So if you are interested in getting a credit repair agency to help you improve your credit file, make sure you compare different options and research their services so that you know exactly what you are paying for.

Want to know more? Check out Finder's guide to Australian credit repair companies to compare your options.

What types of credit cards can I get after bankruptcy?

You'll need to have a good credit score to apply and be approved for a credit card in Australia. This means that you're unlikely to be eligible for a credit card shortly after being discharged from bankruptcy. If you've been following the steps above and improving your credit score, there are some credit cards that could suit you:

  • Credit cards with low minimum income requirements. These cards have low minimum annual income requirements of around $15,000 to $25,000 per year. They usually offer features such as low interest rates, competitive annual fees and sometimes 0% balance transfer offers. If used properly and paid in full each statement period, these cards could help you build up your credit history without high costs.
  • Low credit limit cards. These cards have low maximum credit limits, which can help you keep your spending under control. When you apply for a credit card, you should request a realistic credit limit and make sure you stick to a budget to avoid overspending. Again, paying off your balance in full each statement is ideal and will help you avoid interest costs.
  • Joint account credit cards. You can apply for some credit cards with another person, which means both your credit histories will be assessed for the application and you will share responsibility for the account. If the other applicant has a good credit history, it can increase your chances of the credit card being approved so that you can start building up a good credit score.

You should only apply for a card when you are confident you’ll meet the eligibility requirements and can manage the account responsibly. Bankruptcy can remain on your credit report for seven years, so you may want to contact the bank before you apply to discuss the likelihood of your approval.

Make sure to compare your options and consider contacting the card issuer before applying to discuss your likelihood of approval before applying.

Compare low credit limit credit cards

1 - 12 of 128
Name Product Purchase rate p.a. Balance transfer rate p.a. Annual fee Min credit limit
St.George Vertigo Card
13.99%
0% for 28 months with 1% balance transfer fee, then 21.99%
$55
$500
Get a 0% p.a. interest rate on balance transfers for 28 months (with a 1% balance transfer fee).
Westpac Low Rate Card
13.74%
0% for 28 months with 2% balance transfer fee, then 21.99%
$59
$500
Save with a 0% p.a. interest rate on balance transfers for 28 months (with a 2% BT fee). Plus, a low 13.74% p.a. purchase interest rate.
NAB Low Rate Credit Card
13.49%
0% for 28 months with 2% balance transfer fee, then 21.74%
$0 first year ($59 after)
$1,000
Get a 0% p.a. interest rate on balance transfers for the first 28 months (with a 2% BT fee). Plus, save with a $0 first-year annual fee.
ANZ Low Rate - Credit Back Offer
13.74%
21.99%
$58
$1,000
Get $250 back on your card when you spend $1,500 on eligible purchases in the first 3 months.
St.George Vertigo Card - Cashback Offer
13.99%
6.99% for 12 months, then 21.99%
$55
$500
Get up to $400 cashback at eligible supermarkets and petrol stations in the first 180 days. Plus, a low interest rate for purchases.
American Express Essential Rewards Credit Card
23.99%
$108
$2,000
Offers up to 80,000 bonus Membership Rewards Points (20,000 points each month when you spend at least $1,000 on eligible purchases within the first 120 days). Ends 23 July 2024.
Westpac Low Rate Card - Cashback Offer
13.74%
$59
$500
A no-frills card offering up to $350 cashback: $50 each month you make at least $1,000 of eligible purchases for the first 7 months.
American Express Low Rate Credit Card
10.99%
$0
$2,000
Offers a low ongoing interest rate of 10.99% p.a. and a $0 annual fee. Plus, complimentary purchase cover.
Qantas American Express Discovery Card
23.99%
$0
$2,000
Earn uncapped Qantas Points for every $1 dollar spent, plus a $0 annual fee.
American Express Velocity Escape Card
23.99%
$0
$2,000
Save with a $0 annual fee and earn 0.75 Velocity Points per $1 on everyday purchases.
Westpac Lite Card
9.9%
$108
$1,000
Save with 0% foreign transaction fees, a low interest rate for purchases and cashback offers through Westpac Extras.
NAB StraightUp Card
0%
$0
$1,000
Save with 0% p.a. interest charges and 0% foreign transaction fees. Plus, $0 monthly fees when you don't use the card or carry a balance.
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If you've filed for bankruptcy, there are a few different strategies you can consider to get your finances back on track. Build up your savings and pay your accounts on time. If you've been discharged from bankruptcy, you should only apply for a credit card or other credit products once you've taken the time to improve your score.

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Jeremy Cabral is the chief operating officer and global head of publishing for Finder. He has written hundreds of comparisons covering everything from credit cards to travel money to Netflix TV shows. Jeremy has a Bachelor of Business (Marketing) from the University of Western Sydney. See full bio

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140 Responses

    Default Gravatar
    BrockSeptember 28, 2018

    Once all defaults are removed from my credit file (after 5 years) can they still appear on my credit report when applying for finance/credit? Or are they completely gone after 5 years?

      Default Gravatar
      JoelSeptember 28, 2018

      Hi Brock,

      Thanks for leaving a question on finder.

      When a default is recorded on your credit report, it remains there for five years. During those five years, potential lenders may look unfavourably on your credit application, as the default indicates you have failed to pay off a debt in the past. Defaults will only stay in your file for 5 years. After that period when you will get your credit report, it will no longer show up.

      Please send me a message if you need anything else. :)

      Cheers,
      Joel

    Default Gravatar
    TaraApril 23, 2018

    I was discharged from bankruptcy in 2012. Since then I have bought a house and have a credit card but no credit score as it says its still on my record, it shouldn’t be. Who do I speak to?

      AvatarFinder
      JeniApril 23, 2018Finder

      Hi Tara,

      Thank you for getting in touch with finder.

      Your name will be on the National Personal Insolvency Index (NPII) permanently, with a record of how your bankruptcy was resolved. It will also be listed on your credit history for up to five years, or longer depending on the circumstances.

      To repair your credit rating, you may seek professional help from a credit repair specialist. There are a number of credit repair agencies that claim they can improve your credit report. These ‘credit fix’ or ‘debt solution’ companies may advise you on your credit file and act on your behalf to challenge any incorrect listings on your credit history but may not be able to do much to actually fix your credit file after bankruptcy.

      I hope this helps.

      Have a great day!

      Cheers,
      Jeni

    Default Gravatar
    DanielSeptember 26, 2017

    What is my credit score.

      AvatarFinder
      JudithSeptember 27, 2017Finder

      Hi Daniel,

      Thanks for contacting Finder.

      You can request a copy of your credit file to view your credit score. This details the credit activities recorded under your name, including the product and financial institution involved.

      Please be informed that this would take up to 10 business days and can be requested free once a year. If you go over one request in a year, a corresponding fee will be paid to the credit bureau.

      I hope this helps.

      Regards,
      Judith

    Default Gravatar
    sonyaFebruary 10, 2017

    I declared bankruptcy 6 years ago, how do i go about getting my name cleared so i can get credit for things like a mobile phone?

      AvatarFinder
      DeeFebruary 17, 2017Finder

      Hi Sonya,

      Thanks for your question.

      If you enter into bankruptcy it will be removed from your credit file two years from the date you’re discharged or five years from the date you became bankrupt, whichever is later.

      In the meantime, you may check our guide on how to improve your credit score. This should help you get back to your financial feet and be able to apply for other things such as mobile plans.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Anndy

    Default Gravatar
    JoshSeptember 5, 2016

    Hi just wondering i am newly discharged from bankruptcy and i was hoping to get a credit card as i have a family and would love to have something there for emergency. Which credit cards may i be able to get or were might give me the best chance

      AvatarFinder
      ArraSeptember 20, 2016Finder

      Hi Josh,

      Thanks for your question.

      Please note that finder.com.au is an online comparison service and is not in a position to recommend specific products, providers and services.

      To help you get back on track from bankruptcy and improve your chance of credit card approval in the future, you might want to check “What types of credit cards can I get after bankruptcy?” and compare your options from the comparison tables following that section on this page.

      I hope this has helped.

      Cheers,
      Arra

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