Is your trust deed complete? Have you made the final payment? How are you feeling? Being debt-free is an achievement and nothing can match that feeling.
After all, you have waited months counting pennies for this day. You must be going through a lot. A lot of weight must have left off your shoulders. Finally, you will be relieved and free of apprehension. Your next salary credit will be all yours which means you can spend it in any way you want.
You must be wondering whether to save that money or splurge on something. You must also be thinking about whether you will be able to get a loan/credit card/mortgage again.
Once your repayment plan is over, it is time for you to think about living a debt-free life. Here are a few tips to help you from Carringtondean:
Celebrate a Bit
It might seem counterintuitive but you have really achieved something. Don’t underestimate your achievement. You have been working hard for so long to go over that mountain of debt and after four long years, you have finally completed your goal. It’s time for you to take some money out of your next wage packet and do something nice for yourself. Celebrate this moment by creating a happy and cherished memory. It could be a ticket for your favorite band or a bottle of champagne.
Maintain That Patience
Once your trust deed has been completed, you need to remain patient as the insolvency practitioner is likely to take a few more months before you get that discharge letter. All the loose ends need to be tied up neatly. Each creditor has to be paid and appropriate paperwork for writing off the remaining debt needs to be filed. It is going to take some time but you shouldn’t worry.
Focus on Budget
You have now built up immense budgeting skills with the help of that Trust Deed. Use it as a foundation to keep your future free of debt. There is no harm in treating yourself once in a while but try to save some of that extra income for the next few months in order to build an emergency fund.
Having Goals Help
Now is the right time to plan for your future as you have some disposable credit. Write down some ideas. Maybe it’s time to save some money for that down payment or finally take that trip you have always dreamed about.
Maybe you would want to become a business owner one day. Simply put, it is the right time for you to create some dreams and make use of your budgeting skills to figure out the amount of money you’re going to need to achieve that dream and how long it’s going to take you.
Rebuilding the Credit Score after a Trust Deed
It’s a tough situation to be in and your credit score will be in the doldrums. It is going to take some time to get back to respectable levels. The trust deed is going to be there on the credit record for a period of six years once it has been completed. This shouldn’t prevent you from having a plan to rebuild that credit record. Start slow and work steadily.
When it comes to the evaluation of credit history, the most recent events matter a lot more as compared to events in the past. It gives you an opportunity to add some good credit events to counter the past credit problems.
In case you are already paying a mortgage, do not miss out on payment. Similarly, make sure you do not miss out on any other payments you are supposed to make, especially the items not included in the trust deed. One such example is secured loans.
Another way to quickly rebuild your credit is to get a credit card with a low monthly limit. However, choose this option only if you can maintain discipline and if this is the right solution for your attitude and financial situation. If you cannot have self-control with credit cards, do not try this option. Such credit cards are specifically for people with financial issues.
These credit cards have high interest rates but the interest rate doesn’t matter for rebuilding credit. Buy at least one thing each month with this credit card. It could be your weekly shopping or patrol for your car and make sure the balance is fully paid off when the bill arrives. It is important that you do not pay any interest on the credit card. If you keep repeating this pattern for many months, it won’t take long for you to build a good credit record.
Don’t Get into Debt
You will always be tempted to spend some money. However, it’s time for you to be extremely vigilant about it and not give in to the temptations.
If you have obtained the credit card for the specific purpose of rebuilding your credit, make sure you use it only for making that one monthly purchase for rebuilding your credit and not to buy any other things.
Don’t give into your friends’ demands to spend more money than you can afford. If you are unable to resist, spend some cash and do not carry your credit cards.
Don’t forget the tough time you had when paying your Trust Deed for four years. Use it as motivation to avoid temptations.
Avoid special discounts or deals on store cards
If you do not have self-control, try not to visit any shops. Think about leaving your purse behind to avoid temptations to spend money.