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Credit Impaired

Your credit file is one of the most important aspects of your financial life. Without a clean credit file it can be very difficult to obtain finance, even for something so simply as purchasing a mobile phone.

If your credit file is impaired by way of a defualt , judgement or bankruptcy the type of lenders that will give you finance will be greatly reduced and the financiers that will prvide you with finance will often charge you a much higher rate, this, as they consider the rate for risk based on your credit worthiness. The higher the credit risk the greater the rate will be. At BMFS we can asist you getting your finances back on track and find the best funder to suit your situation, whether it be a short term financial plan to fix the credit issues or a long term plan to have the credit issues reparied and get you back on the right track.

Prevention is always better than the cure; here are our top five tips to avoid getting your credit file into a mess:

  • Make sure creditors are immediately informed of a change of address or contact details.
  • If a direct debit has stopped but the debt still exits don’t wait to be contacted by the creditor, call first.
  • If there is an issue with making a payment, call the creditor immediately to discuss.
  • Make sure everything is in writing.
  • What happens if you do not pay a loan?

Normally if a borrower fails to make a loan repayment on time, a lender can take prompt and immediate action to recover amounts owing, such as:

  • Demanding the full amount of the loan immediately (not just the late payment) , ie accelerating the loan.
  • Taking possession of any secured goods and property.
  • Issuing legal proceedings to recover the outstanding debt.
  • Division Two of Part Five of the Code modifies the common law rights of the lender and sets out protocols for enforcement proceedings under a credit contract.
  • Default notice under section 80 of the code

If a borrower misses a payment under a loan, the lender has to comply with the requirements of section 80, a lender cannot begin enforcement proceedings unless,

  • The debtor is in default of the credit contract.
  • The debtor (and any guarantor) has been given a default notice in compliance with section 80 which at least 30 days to remedy the default.
  • The default has not been remedied within that period.

Remember the following tips:

  • Keep receipts or other records of payment and copies of any letters you send or receive (when writing letters, remember to include the date).
  • If you are asked to provide documents, make sure you keep a copy for yourself (if possible, keep the original and send the copy).
  • Keep a note of telephone conversations or meetings. Write down the time, date and whom you spoke to (their name, their company or business and their job title).
  • If you make an agreement over the phone or in person, ask for it to be confirmed in writing (and also confirm it in writing yourself).
  • Keep all your records together to avoid losing any important information

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Duration a listing will remain on your credit file for the following period:

Court Writs & Summons 4 years

Payment Defaults, Court Judgments and Credit Enquiries                                      5 years

Bankruptcy & Part 9 Debt Agreements & Clearouts                                                   7 years

External Administrations & Previous Directorships                                                   10 years

If these things do occur often the credit files can be repaired, however it is generally at a certian level of expense and can vary depending on the severity of the credit issue, therefore always remembder prevention is the best plan of attack.

IF you find that you are not keeping up with your credit card, personal loans and mortgage payments it would be a good idea to call BMFS before the payments fall too far behind.