Many startups have landed into bankruptcy over the past few years. However, a few owners managed to improve the credit rating post-filing. But, the opportunity remains with every UK citizen suffering through it or in the process of discharging debts.
Fast loans with no guarantor can become a suitable option for owners with low or manageable debts. However, a few other solutions can help to improve credit rating and save valuable assets.
These include monitoring credits, considering card options, avoiding past mistakes, payment reports for the Credit Bureau, etc.
Solutions for Improving Credit Rating Post Bankruptcy
● Monitor Credits
The primary step for every startup is to monitor credit ratings closely. It should include both personal and organizational scores. It would help to assess the remaining debts, assets, liabilities, creditors, debtors, etc.
Moreover, credit reports can have inconsistencies. Therefore, going through them would help to spot errors and avoid making extra payments. Furthermore, the bankruptcy filing date remains in the credit report for the next ten years.
However, a source suggests that the date could last for six years post-filing. Therefore, owners must make sure that the filing date is correct. Additionally, owners must ensure zero balance in the discharged accounts.
● Consider Card Options
Filing bankruptcy can diminish the capacity to take a start-up business loans in the UK or other forms of loans. However, it doesn’t prevent owners from applying for a secured or retail credit card.
However, secured credit cards require an initial deposit that remains as the credit limit. Meanwhile, retail credit cards come with unmanageable APRs and penalty fees. Therefore, owners must take these types of borrowings seriously if they want to improve their credit rating.
The objective of a retail credit card is to provide money quickly to the borrower. Additionally, it provides an option to the borrower to continue manageable repayments and improve the credit score.
● Avoid Past Mistakes
Bankruptcy often arises from taking high investment risks, spending money on unrequired necessities, not managing accounts, etc. It can also happen with owners that can’t separate their personal and firm borrowings.
Therefore, clearing a debt by taking a retail or secured credit card would prove useless if the past mistakes kept repeating. The best method to avoid them would include jotting them down, exercising self-control, taking precautious decisions, involving an advisor, etc.
A no guarantor, bad credit, or debt consolidation loan can also suffice through the ongoing financial crisis. However, before taking any form of borrowing, make sure of the repayment capacity, monthly deductions, ongoing expenses, etc.
● Report to Credit Bureau
The credit score gets drastically affected by payment history. However, the lenders and creditors have no obligation o reporting the same to the Credit Bureau. But if you have become consistent in recovering from debt, then you should report it.
It would help to provide a positive impact on the credit rating and open new borrowing opportunities. Meanwhile, not fulfilling this step would keep the ongoing score intact, diminish new loan options, and avail loans at high APRs.
The Credit Bureau would most likely follow through with the information and reconfirm with the creditors and lenders. Therefore, they would start noticing a firm that manages to repay consistently and even offers better lending choices.
As a result, it can build a long-lasting, low APR, and manageable repayment relationship with the creditor or the lender.
● Check Other Money Borrowing Options
A no guarantor loan can help to avoid a hard credit check and provide instant money. However, a guarantor loan offers other benefits. By taking the help of an authorized user or a cosigner, the burden doesn’t fall only on the borrower.
Instead, the cosigner can help the borrower in case of default or missing repayments. Most people take the assistance of friends and family members as cosigners. Therefore, the borrower would not get stressed during emergencies.
Additionally, the borrower has the option to repay the cosigner at his or her convenience. A spouse can become the best-authorized user of a guarantor loan. The credit card can become shareable between couples and ease their money burden with each other financial assistance.
A dispute in the relationship can put the borrower in a challenging situation, mostly due to the documentation. Therefore, we would suggest recovering the money as early as possible to have a healthy ongoing relationship.
According to a source, bankruptcy lasts for twelve months. However, the report of the filed bankruptcy remains between six to ten years. Therefore, it can diminish money borrowing options for bad creditors.
Moreover, it makes getting out of debt difficult. However, there are a few solutions like monitoring credits, choosing the correct cards, avoiding mistakes done in the past, etc. Similarly, filing reports to the Credit Bureau and checking other money borrowings like guarantor loans can prove useful.
However, borrowers must assure that they can easily manage repayments even if they avail no guarantor or bad credit loans. The mismanagement can lead to even lower credit ratings, filing of bad credit borrower reports, etc.
Therefore, it would jeopardize the chances of improving credit rating, becoming debt-free, and diminish better APR loan choices. So, borrowers must follow the five steps to achieve the desired credit scores and help their business.