Why is my debt relief order still affecting my credit rating?

Dear James,

I had a debt relief order about two years ago and I don’t understand why it is still saying that my credit rating is bad?

Cherie, Paignton

Dear Cherie,

It’s great that you’ve taken steps to regain control of your finances using a debt relief order (DRO). Assuming this is now fully discharged your debts should have been cleared or at least written off, which is a positive step forward for you. Unfortunately, your credit rating is likely to take a little longer to recover as your credit report looks back over the past six years of your borrowing history. But there may be things you can do to improve your credit rating right now.

Start by checking your credit report to make sure the DRO has been updated as ‘discharged’. If it hasn’t then please tell us. You should find that the accounts that were included in your DRO are shown separately on your report, which is quite usual. These accounts are likely to be shown as defaults, as you broke the terms of your agreements. Like the DRO, defaults stay on your report for six years, from the original date of default. Importantly, any defaults should also be marked as satisfied or partially settled so if any aren’t you should contact the relevant lender. If you need help, ask us to raise a query with them on your behalf. Your credit rating is likely to improve in the short term once the DRO and any individual defaults are marked as cleared, and in the medium term as they get older. Some lenders will rate your most recent credit history more highly than events that took place several years ago. However, some lenders may also have a policy whereby they refuse applicants that have a default on their credit report regardless of how old it is and whether it has been paid or not.

Additionally, if the reason for you defaulting was the result of something out of your control – such as losing your job or a serious illness – you might benefit from explaining this on your credit report. Simply send us a statement of up to 200 words describing any relevant circumstances and we’ll add this to your report. Known as a notice of correction, lenders will see this when they check your report in the future and should factor it in to their decision. Please note we can’t add a statement that is frivolous, factually incorrect or defamatory (January 2016)

You can find archived Ask James questions arranged under subject headings such as ‘applying for credit’, ‘credit and debt’ and ‘fraud’ at the main Ask James page.

6 thoughts on “Why is my debt relief order still affecting my credit rating?

  1. Ash

    Hi

    I took out a contract in my mums name when I was 17 and recently I found out that they haven’t taken any payment for 6 months but I didn’t know this. I am now really worried as it was in my mums name and not mine so it will affect her credit. However, I just paid the amount that was not taken. How long do you think it will take for it to disappear

    Reply
    1. CreditExpert Stuart

      Hi Ash, I’m sorry to hear about this situation that has happened with your phone contract. If the account is in your Mother’s name then and the account is being shared with credit reference agencies, then this would show on her credit report. Sadly this would mean that this would have an impact on her credit report. Payment history on your credit report would remain for six years.

      If the payment was not being taken as the result of an error, you might want to talk to the phone provider regarding this as they might be able to look into this further. You might also want to advise your Mother to check her credit report here.

      Kind regards,
      Stuart

      Reply
  2. Charlotte

    Hi,

    My debt relief order is due to expire on 12th nov 2016 after being on my credit report for 6 years.

    What are my chances of getting a mortgage from a high street lender? I have a 5% deposit saved for a house seen.

    Reply
    1. CreditExpert Neil

      Hi Charlotte, having a Debt Relief Order (DRO) coming off your report should certainly help with any future applications but it will also depend on what other information is recorded on your report. If any accounts were included in the DRO then they should have a default date the same or earlier than the DRO and we would also expect them to come off your report.
      It will still be up to the lender as to whether they accept an application or not, you may find our guide in preparing for a mortgage application useful here. Kind regards Neil

      Reply
  3. Stuart

    Hey Guys
    I am not sure if this feed is still running but,

    I filed for a DRO back in 2014 after losing my job, it wont be off my credit rating until 2020.

    I am mow in a high paying position and have recently married. We are currently looking at purchasing a home, we have a minimum of the 20% required. my credit score is around the mid 600’s. is there the possibility of mr getting a mortgage.

    If not if we go through my wifes bank will they require my history. My wife is a former home owner with very good credit

    Thanks
    Stuart

    Reply
    1. CreditExpert Neil

      Hi Stuart. When a lender is considering an application they will also take into account information that is not on your credit report such as income or deposit, but it is always up to the lenders themselves as to what they are prepared to accept. Some lenders may only be prepared to offer at a higher rate is they have concerns about information on your report.
      Should you make a joint application with your wife then they would look at both of your credit reports and so your wife’s information would be taken into account.
      Kind regard Neil.

      Reply

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