Your credit record is a very important part of your life. It will dictate how you are treated when applying for credit or credit based products. From bank accounts to insurance your credit record comes into play.

Many people worry that they will destroy their credit record by declaring themselves bankrupt; is this true or not?

Let’s step back and consider the facts. In most situations where people are thinking about bankruptcy their credit record is already damaged. It only takes a few missed payments or a month or two of mortgage arrears for your good credit rating to slip down into the lower rankings where in most cases it would be described as poor.

In fact in many cases where people have not even had problems with debts and repayments their credit can be poor. This can be through applying for credit too often or for credit they cannot realistically achieve -too many credit searches equal alarm bells to anyone thinking of giving you credit. The reason is that you appear to be credit hungry.

When you go bankrupt your credit rating is hit-hard. There is no secret system that will get you back on track in a year or so-the repair process is a long one but your credit can be repaired if you know what to do and when and how to do it.

Bankruptcy stays on your credit record for six years from the start of your bankruptcy. In the same way an IVA will stay on your credit record for six years from the start of the IVA. The main difference is that with bankruptcy you can start to repair your credit record after the bankruptcy has finished-normally twelve months after you went bankrupt. With an IVA you can’t do too much for five years as this is the normal duration of an IVA.

Our advice to people worried about their credit and considering an IVA or bankruptcy is that by declaring yourself bankrupt you will be able to start the credit repair process much sooner than if you take the option of an IVA.

We also recommend that you serve the period of bankruptcy and once discharged start to look at the methods of credit repair. There are techniques that you can use but you must also be careful how you proceed-your credit record is very delicate and any mistakes take some time to repair themselves.

Finally you should not take the stance “I will never get credit again” if you go bankrupt. Credit is a necessary evil in today’s world and the only way to improve your credit is to take some more on and show that you can handle the payments without getting into trouble again.

Have a look at our Sister Company www.thecredithospital.co.uk for further information on specialist credit repair.