People often ask how bankruptcy or insolvency affect credit ratings.
Take the example of somebody who is unwell and needs to go to the hospital for an operation. It’s fair to say that in the days and weeks post operation the patient will not be fully well – though they are now on a course to health.
So it is with a credit rating for people in insolvency or bankruptcy.
When a person is considering insolvency or bankruptcy it follows that their credit rating is poor. There will almost always have been multiple defaults. However, after insolvency or bankruptcy, the person is now on the way to a healthy financial position which will happen in time.
We find that in the case of Personal Insolvency people can access credit very quickly again.
In the case of bankruptcy, it will take some time and it may be necessary to use non-bank lenders initially where higher interest rates are charged. But over time a credit rating returns.