If you’ve had financial trouble in the past, then you may have a poor credit score. There are a number of factors that can negatively affect your rating and each one may have a different length of time that it stays on your file.
Here are some of the most common transgressions and how long you can expect them to stay on your credit report.
What negative factors affect my credit report?
- Individual voluntary arrangement (IVA)
- Late payment
- County court judgement
- Debt relief order
- Defaulted debt
What is bankruptcy?
Bankruptcy is a form of insolvency that is often seen as a last resort. It’s a declaration that you are unable to pay off any existing, unsecured debts. When you go bankrupt, most of your debt will be written off.
How long does bankruptcy stay on my credit report?
Bankruptcy will stay on your credit report for six years from the date of the order. In rare cases, where the person being made bankrupt is deemed to have been dishonest during the bankruptcy process, the notation can be extended for up to 15 years.
What is a late payment fee?
A late payment fee is when you are charged a fee for having not made a repayment on time. This can happen as early as a few minutes after your payment is due. It could be a payment on a credit or store card or on a utility bill.
How long does a late payment stay on my credit report?
A late payment will stay on your credit report for up to six years. This is true even for closed accounts.
What is an individual voluntary arrangement?
An individual voluntary arrangement (IVA), is a legally binding agreement with your creditors to pay off your debt. It can be all or part of your debts. Payments will be made regularly to an insolvency practitioner who will then ensure your payments go to your creditor and divide them up if you have more than one creditor. An IVA is often offered as an alternative to bankruptcy, by freezing your debts and allowing you time to pay them back over a set period. If after this time there are debts still owed, they will be written off.
How long does an individual voluntary arrangement stay on my credit report?
An individual voluntary arrangement (IVA) stays on your credit report for six years, from the date of the arrangement starting.
What is a county court judgement?
A county court judgement, or CCJ is when the company or person you owe money to, goes to court to say that you have failed to pay them. If you do not respond, you can be issued with a CCJ. You will receive a letter explaining what you owe and to whom, how much you need to pay and a deadline to make a payment by. A CCJ gives your debtors the ability to seize your property or take some money from your wages.
How long does a county court judgement stay on my credit report?
A county court judgement, or CCJ will not appear on your credit report if you pay the debt, in full within 30 days of receiving the it. If you fail to pay within 30 days, a CCJ will stay on your report for six years from the day you received the judgement.
What is a debt relief order?
A debt relief order (DRO) is an order that freezes your debts for a period of time, usually a year. It can only be applied in certain circumstances and with certain debts but can be suitable for non-homeowners on low incomes with qualifying debts of less than £20,000 in England and Wales and £15,000 in Northern Ireland. After the length of the DRO, your remaining debts will be written off.
How long does a debt relief order stay on my credit report?
A debt relief order usually lasts a year but will stay on your credit report for six years from the start date of the arrangement.
What is a defaulted debt?
A defaulted debt is when you miss payments on a regular basis and are unable to bring the account up to date. Your creditor will eventually “default” the debt, which is an official way of saying that it can’t be paid. You won’t be able to use the associated account anymore and your provider will send your debt onto a collections agency.
How long does a defaulted debt stay on my credit report?
A defaulted debt will stay on your credit report for six years from the settlement date.
What can I do to fix my credit report?
There are many ways to help fix credit mistakes that appear negatively on your credit report. Lenders don’t give equal weight to all mistakes to every person. It depends on your overall credit history. For example, if you miss one payment, but the rest of your credit history is good, it won’t have as much of an impact as it would for someone who has defaulted on other debts, missed payments regularly or been declared bankrupt.
For more information on budgeting and ways to get out of debt, read our guide on how to better manage your finances.