How a Debt Relief Order affects your credit rating

A record that you have a Debt Relief Order (DRO) will be listed on your credit file. This will have a negative effect on your credit rating and make it difficult for you to borrow money.

The record of your bankruptcy will remain on your credit file for 6 years. Your credit rating will not start to significantly improve until this time has passed and the record of your bankruptcy has been taken off your file.

You should also remember that after you have started a DRO you will stop making your normal monthly payments to your creditors. This means that your accounts will go into arrears or further into arrears. As a result of this your creditors are likely to issue you with default notices which will also be recorded on your credit file for 6 years.

Should I be concerned about the affect on my Credit Rating?

Remember if you are insolvent and considering a DRO, your credit rating is likely to become worse whether you start the solution or not. If you are in a position where you cannot pay your debts you are likely to start missing payments to your creditors even if you do not go bankrupt. As a result your credit rating will be negatively affected with missed payment and default notice records anyway.
If you start a DRO or any other debt management solution you have the opportunity to get your debts under control and work towards getting a better credit rating in the future.