How will a Debt Relief Order affect my credit rating?

If you miss or reduce the payments you make to your creditors even as part of a Debt Relief Order (DRO), your credit rating will become worse.

If you start a debt relief order, you will pay less to your creditors each month than you originally agreed. It is therefore highly likely that they will view your account as being in default and issue you with a default notice.

Your DRO and any default notices will be recorded on your credit file and remain there for 6 years. During this time, the DRO and all late payment records and default notices will show up if anyone carries out a credit check against you. This is very likely to stop them from lending you more money.

See below for more information about how a DRO affects your credit rating and ways to improve your credit rating.

Wouldn’t my credit rating be affected anyway?

If you are struggling with debt and you are no longer able to pay your creditors, your credit rating will be affected whether you start a Debt Relief Order or not.

As such, if you are in a position where you are unable to afford to pay your creditors and cannot help but miss your normal payments to them, worrying about your credit rating should not be the primary factor to consider when deciding whether to start a DRO.

Improving your credit rating

If you believe that your credit rating is already poor or you have been refused credit and do not know why, have a look at the Beat My Debt guide to improving your credit rating in the "Related Links" box above. You can also get a free credit report here.

This guide will help you understand why you have a problem and what you can do to improve your credit rating.

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