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[Jan67]

I have been bankrupt for 4 years, discharged for 3 years. I have a mobile phone contract that I have had for many years. I am currently at the end of the current 2 year contract and I am debating on continuing with a contract or changing to pay as you go. I was wondering if:

1) Does having a contract help with my credit score? Always pay my contract for full amount and on time
2) If I can cancel will i be able to get another contract in the future?
3) Is it best to have some kind of credit on my report for future applications of credit, e.g a credit card to help build my score up?

Thanks for any advice

[Melissa S]

hi there jan26 and welcome
firstly congratulations for going though bankruptcy and coming out the other side.

I would take a look at the article linked below which will help answer your questions in more detail but it is important to remember that your credit rating will be affected for 6 years after the Start of your bankruptcy. It is possible to get certain credit cards designed for people with poor credit such as a vanquis card. these have high interest rates but the idea is to only use them for general living expenses and pay in full each month. this will build positive credit again.

you may find it difficult to get new credit such as a new contract with a different mobile service until you have rebuilt some credit history. also checking after the 6 years has passed that all your default notices are removed from your credit file will help.

Improving your credit rating after bankruptcy

[James Falla]

Hi Jan67

Melissa has posted a very helpful link so it would be well worth a look at that. The fact that you were bankrupt in the past will remain on your credit file for 6 years so you have 2 to go until it will no longer be there and you can really start to regain a good credit rating.

In terms of your mobile phone the fact that you are maintaining a contract and making the payments on time will help but only in a very minor way as this type of credit facility is relatively small. If you feel that you will get significant benefit in terms of cost savings by changing to pay as you go then you should think about it. Having said that your options for getting a new phone on contract may be limited in the short term.

As Melissa has said a really good way of really making a difference to your credit file is to get a so called credit repair credit card. You will be eligible now you are discharged from bankruptcy even though your credit rating is still poor. Using this card responsibly for example paying for the shopping and then repaying the balance in full at the end of each month will really help improve your credit rating.