Debt Arrangement Schemes and Credit Ratings – How Are They Affected?

Debt Arrangement Schemes and Credit Ratings – How Are They Affected?

Several things we ignore today revolve around having a decent credit score and choosing the Debt Arrangement Scheme (DAS) that can sweep it in a few weeks! However, if you are suffering under a burden of your debt that’s threatening to overwhelm you, choosing the Debt Arrangement Scheme will be the best move you can make under your circumstances.

Credit history, which is arranged by credit reference agencies, helps give a sign of your creditworthiness to a loan company, for instance, have you ever defaulted on a payment, or been sequestered? Entered into a Trust Deed or been on DAS? Do you have too much debt? You’re then scored by your lender and compared to a wish-list of exactly what they consider you to be a perfect debtor, subtracting or adding points for different factors such as:

  1. How much credit score you currently have?
  2. Your spending routines and habits
  3. Your current level of financial debt
  4. Any payment defaults you’ve made
  5. The interest rate you’re being charged

Try to keep your credit history ‘clean’

It is not unusual for associations or incorrect entries to be made on your credit report, which means you need to make certain that the actions of housemates or ex-partners don’t affect your report. You better send a letter of disassociation to Callcredit, Experian or Equifax in case you find you’re financially associated with someone you should not be.

You should always be on the electoral register

Being on the electoral roll signifies stability to the lender, that you plan to stay and build a life for yourself where you stand, and that gives them confidence in you.

Pay back in a timely manner

Move heaven and earth to make certain that you are paying your amounts regularly – for instance, a home loan or mobile phone contract.

Never miss a payment

Live by the saying “if it can happen, it’ll happen” to foresee issues beforehand, as credit reporting agencies may still log any glitches on your record, even if they weren’t your fault. With plenty of forethought, try to set up standing orders and direct debits of your payment schedules to make certain they’re cleared. Keep an eye on payment schedules, especially those which are due on 28th or 29th of every month.

Use credit cards very wisely

If used appropriately, a credit card can certainly help build up your credit history. Every time a payment is made, a favourable credit ‘event’ is added to the file. Use your card ONLY to buy one small thing from a shop or some petrol every month and try to pay it off 100%.

It may be that only pre-paid cards or those with high-interest rates are available to you, but as you will not be carrying an account balance, this does not matter. All that makes a difference is those small good credit events being added to the record.