Opening a current account /mortgage after discharge

ab07ash_2

Hi,
I declared bankrupt in 2016 and discharged the year after.  So as I understand its 6 years until it comes off my credit file completely ?  I am in a much better financial position now and have managed to start saving for deposit on a house, obviously not until I'm fully discharged as I'm still unable to open an ordinary current account just a basic one. Has anyone found this after bankruptcy? Is this normal to be rejected for a current account (did not apply for an overdraft) and will. It just automatically come off my file next year and I'll be able to apply for a mortgage? 

Helpmeoutofthismess

ab07ash_2 said:

Hi,
I declared bankrupt in 2016 and discharged the year after.  So as I understand its 6 years until it comes off my credit file completely ?  I am in a much better financial position now and have managed to start saving for deposit on a house, obviously not until I'm fully discharged as I'm still unable to open an ordinary current account just a basic one. Has anyone found this after bankruptcy? Is this normal to be rejected for a current account (did not apply for an overdraft) and will. It just automatically come off my file next year and I'll be able to apply for a mortgage? 

It’s very normal to get rejected for a full current account whilst the bankruptcy is still showing in your credit file but once it’s gone, they are pretty easy to get.  Since my bankruptcy fell off my credit file in 2019 I’ve never been rejected for anything.

I was able to get a starling account and a monzo full current account whilst the bankruptcy was still showing and about 5 years old, I don’t know if they are stricter now though.

To have the best chance of getting a mortgage/ bank account after bankruptcy you should get a credit card, spend a small amount on it every month then pay it in full by DD once you get the statement.  If you don’t have any credit facilities showing a good payment history you will still struggle to get approved for anything even when the bankruptcy drops off.

h x

luvchocolate

I waited until the 6 years were up..then got a current account and M and S credit card. Which is paid in full every month by DD

NewLeaf1986

Mortgages after discharge are absolutely possible, as long as everything else is in place, e.g.:

You have a good salary
You don't have debt
All of the prior debts which were included in your bankruptcy are now correctly reflecting on your credit file as Settled / Satisfied with £NIL balances

MetroBank have a range of mortgages available to those who were declared bankrupt 3+ years ago (so open to those who have been discharged 2+ years), with a maximum 80% LTV
Nationwide will consider a mortgage application if you've been discharged 3+ years
and Skipton will consider an application if you've been discharged 4+ years.

As more years pass, the higher LTV you'll be able to get - I'd imagine at the three year point you won't be able to borrow over 85% LTV and at the four year point you might be lucky enough to borrow 90% LTV.

I'd hazard a guess (but speak to an all of market broker to confirm) that we have Bob Hope and No Hope of obtaining a 95% LTV mortgage until at least six years have passed from the bankruptcy order date and there's absolutely zero adverse on our credit histories. 

I wouldn't consider this a hinderance anyway as the higher LTV mortgages carry a horrendous interest rate. 

We might also find that the presence of a historic BR order reduces the multiple a lender is willing to use against our income, i.e. no chance of being able to borrow 4.75x or more of our salary.