After your Trust Deed has finished, you’ll be looking to get your life back to normal. The rest of your debt has been written off and for the first time in years the burden of debt has been lifted.
You once had a credit card with a limit of thousands, now anything that requires a credit check may be an obstacle.
Rebuilding your credit can be relatively straight-forward and here are a few tips to get you started.
In This Guide...
Clean Up Your Credit File
It’s important to check your credit file to see if there are any incorrect entries or associations. For example, you may mistakenly be associated with someone you house-shared with in the past, or if you’re divorced you may still be linked to an ex-partner’s finances.
Send A Copy Of Your Discharge Certificate To The Credit Agencies
Once everything is completed with your Trust Deed and all the loose ends are tied up, your Insolvency Practitioner will issue you with a Discharge Certificate. This should then be sent to the credit reference agencies to then update your credit rating accordingly.
The Electoral Register
If you have not already done so, get onto the electoral register as soon as possible. Being on the register will help give lenders and credit agencies a little more confidence to lend to you after your Trust Deed as it is official confirmation of your address.
Pay On Time
If you have to make regular payments on anything – for example a mortgage or mobile phone contract – make sure every payment is on time. One of the good things about a Trust Deed is after spending four years making regular payments you end up very good at it!
Never Miss A Payment
Accidents do happen – sometimes a payment will end up late through no fault of your own, but the credit agencies will still hold you accountable and log that mistake on your file.
Set up direct debits for credit or store card payments to go out well before the payment date. Be aware of cards that take payments every 28 or 29 days, which means the payment dates could change every month.
If you have to move a direct debit to another current account, make sure you have enough money to cover it just in case your instructions are not carried out and it is still taken from your old account.
Get A Credit Card
Please be careful if you carry out the following couple of tips; credit cards may have led you down the path to a Trust Deed so you will need to be disciplined to ensure they don’t lead you there again.
Despite the dangers of credit cards, they can be used as a tool and help you build your credit rating back up after your Trust Deed. Every time you make a payment on a credit card on time, you add a good credit event to your file.
Use the card ONLY to pay for one weekly shop or a tank of petrol every month. When the bill comes in, pay it off in full.
Unfortunately, only cards with high rates will be available to you, but this shouldn’t matter. You should not be carrying a balance like you used to. Some companies may actually reduce the interest rate over time as you prove yourself credit worthy.
The Last Resort… Pre-Paid Credit Cards
If your credit history is very poor, you may find getting any credit cards is difficult after your Trust Deed. If that’s that case, there may be a solution.
Pre-paid credit cards allow you to put money onto your card in advance and, as long as you pay the card’s monthly fee on time, a record of your payment will be sent to the credit agencies to go onto your file.
The sooner you start building up your credit rating, the sooner you will be able to put the past behind you and move on to enjoy all the benefits of a debt-free future.
Trust Deed Example
Example Unsecured Debts
|2||Credit card 1||£6,812|
Your Monthly Repayments Would Be
a Scottish Trust Deed £748
(total contractual repayments)
a Scottish Trust Deed £295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances. For more information on our fees click here