Repair your credit record after bankruptcy, IVA or a DRO

Time for a clean up?  Repair your credit  after bankruptcy, IVA or DRO by correcting errors

After bankruptcy, IVA or DRO, correct any credit record errors then improve your credit rating by using a “bad credit” credit card.

Bankruptcy will badly affect your credit record for six years. This article looks at what should happen, how to correct any problems, and how to improve your credit rating when you are discharged. Even if you have no intention of accumulating debt again, a good credit score makes it easier to rent a house, get a mobile contract or a full current account and it’s essential if you want a mortgage.

The information here also applies to the other two forms of insolvency in England and Wales: IVAs and Debt Relief Orders (DRO). The equivalent of the bankruptcy petition date is the date your IVA or DRO started. The equivalent of discharge from bankruptcy for an IVA is the date your IVA completes; for a DRO it is the date the DRO ends, usually 12 months after the start.

How insolvency should be recorded

After you go bankrupt:

  • Bankruptcy will be shown in the Public Record section of your credit record (for an explanation of the different parts of your credit record, see this Experian page ). It can sometimes take a few weeks for the entry to appear, but when it does, the date on it will be the date of your bankruptcy petition.
  • If it hasn’t already been marked as defaulted when you go bankrupt, an unsecured debt should be marked as defaulted with a default date of your bankruptcy petition. This can take quite a while to happen as the Insolvency Service has to inform the creditor who then informs the Credit Reference Agencies (CRAs).
  • the situation with a secured debt such as a mortgage is slightly more complicated.
    • If you carry on paying your mortgage, not falling into arrears, then a default should not be recorded.
    • If you have stopped paying the mortgage before bankruptcy or when you go bankrupt and a default should be recorded with the bankruptcy date.
    • If you initially carried on paying the mortgage after bankruptcy but later stopped, the default date should be the date you went bankrupt, see ICO guidance in 2007 which stated:
      “[paragraph 14] [If the loan has been included in a bankruptcy] the default should be filed in accordance with the guidance in paragraphs 47 – 48
      [paragraph 48]  If the customer stops payment at a later stage, the default recorded should show the date of the IVA or bankruptcy and the fact that it was settled only by IVA or bankruptcy…” 
  • There will be no change for any debts which have already been marked as in default or for CCJs.

When you are discharged:

  • The Insolvency Service will notify the CRAs who will add this to the Public Record section. This doesn’t remove the bankruptcy note – that will stay on your record for six years.
  • The debts included in your bankruptcy should be marked by the creditors “to show that you no longer owe money on that account (perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way)”  (quote from the Information Commissioner’s Office).

After six years everything vanishes and your credit rating will improve:

  • The bankruptcy marker will drop off your credit record.
  • Defaulted debts will drop off six years from the default date, so some of these will probably have disappeared already, but the rest should go at the same time as the bankruptcy marker.
  • CCJs drop off six years from the judgment date, so they will also be gone six years after date of your bankruptcy petition.

Correcting problems

1) Creditor doesn’t use the correct default date

There is no point in complaining to Experian, Equifax etc about this – they just report what the creditors tell them. You have to ask the creditor to correct the record. Don’t try to do this on the phone because you are likely to spend a long, frustrating time talking to staff who don’t seem to understand what you are saying. Instead you need to write a letter to the Data Controller for the creditor (get the address from the ICO here), send it Recorded Delivery and keep a copy. For an unsecured debt, the letter could follow this template :

re: [account/reference xxxxxxxxxxxxxxx]

I went bankrupt at [xxxxx County Court] on dd/mm/yyyy. I attach a copy of my Bankruptcy Order.

I am writing to ask you to correct my credit file for the above debt. At the moment [there is no default date shown / the default date is shown as dd/mm/yyyy]. This is incorrect and a breach of the Information Commissioner’s Office guidelines and the Data Protection Act 1998. There should be a default date not later than the start date of my bankruptcy.

Please correct this entry within 28 days or supply me with a written reason why you will not do so.

Yours faithfully, 


Recheck you credit file after say six weeks. If it has not been corrected, put in a complaint to the Information Commissioner’s Office using the forms here. Attach copies of your letter to the creditor, proof of posting and any reply from the creditor.

2) Creditor doesn’t mark debt as satisfied when you are discharged

The creditor doesn’t have to mark the debt as fully settled/satisfied so there is no point in complaining if the debt has been marked as partially settled/satisfied.

If you want to get this corrected ideally you need to get a Certificate of Discharge from the court where you went bankrupt (at the time of writing this costs £70 and £10 for additional copies) however many lenders will accept a copy of the free letter from the official receiver that you may have received. Then send the following letter to the data controller for the creditor:

re: [account/reference xxxxxxxxxxxxxxx]

I went bankrupt at [xxxxx County Court] on dd/mm/yyyy. I was discharged on dd/mm/yyyy. I attach a copy of my [Certificate of Discharge]/[letter of discharge].

I am writing to ask you to correct my credit file for the above debt.  The Information Commissioner’s Office guidelines state that my credit file should show that I no longer owe money on that account, perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way.

Please correct this entry within 28 days or supply me with a written reason why you will not do so.

Yours faithfully, 

Again, complain to the  ICO as above if the entry is not corrected.

3) Problems with mortgage debts

It can be harder to get mortgage lenders to correct a date. If the lender has recorded the default date as being the date your house was repossessed not the date of your bankruptcy, you should include in your letter the quote from the ICO guidance in 2007 that is given above.

However it seems that the ICO is failing to apply its own guidelines with this type of situation – if the ICO rejects your complaint, you should complain to the Financial Ombudsman. Here are two cases where the Financial Ombudsman has upheld the complaints, applying the rules about dates as they are described in this article: HSBC mortgage case and Platform mortgage case.

4) CCJs are usually not amended when you are discharged

There is no ‘partially settled’ status for a CCJ and the court only has to mark a CCJ as satisfied if you have paid it in full, which you haven’t. The best you can do is to add a note to your credit file (Experian explains how to do this here) to say that this CCJ was included in your bankruptcy, that you were discharged on dd/mm/yyyy and so you are no longer liable for the debt.

Is it worth doing this?

It is definitely worth correcting the dates of default unless they are just a bit late. If these are months or even years late, then this will delay the time until your credit file is clean as these debts will remain for six years after the default date. If you want to remortgage once your IVA has finished, it is essential that you repair your credit score as much as possible.

Marking your debts as satisfied after discharge is less important.  Even if you get this amended, applications for credit, a normal bank account or a mortgage may well be refused whilst bankruptcy is still on your credit file. If you are close to the six-year drop-off, then you could decide to wait and let that clean everything up. However, getting a debt marked as satisfied will improve your credit rating slightly, which may be enough for you to be approved for a ‘bad credit’ card, see below. It also prevents the debt being ‘sold on’ to another Debt Collector, which is annoying as you have to correspond with yet another person and send them details of your bankruptcy.

Getting positive markers on your credit file

In addition to cleaning out the bad stuff from your credit history, you should aim to start acquiring new, positive credit marks after you are discharged. Make sure you are on the electoral roll, that your address etc are correct on your record, that your bankruptcy discharge is shown and start the clean-up process above. This may take several months to complete if you have to go to the ICO.

Then apply for either a Vanquis or a Luma credit card. If you are refused, double-check your credit file really is clean with all three credit reference agencies and wait six months or so, then apply to the other card.

These two cards are aimed at people with very bad credit and they charge a very high rate of interest.  This doesn’t matter because you should aim to use the card every month and  repay it in full every month, so you will never get charged interest! If you find your balance is creeping up because you are not clearing it in full, then you need to stop spending on the card until it is cleared and have a re-think about budgeting. Your credit rating will not improve faster if you leave a balance on this card.

After you have had one of these cards for a few months, think about getting a cheap monthly mobile phone contract, probably a SIM only one.

This all takes time

If you were expecting discharge to make an immediate difference, it usually doesn’t…  There isn’t a way to speed this up – don’t pay any firms offering a ‘repair your credit’ service because either they don’t work at all, or they will be no better than what you can do yourself. The template letters here are very likely to work and if they don’t, putting in a complaint to the ICO is the best way to repair your credit.

*** Updated 07/02/2015 and 22/04/15 with further information about secured loans

More Debt Camel articles:
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Other articles on credit ratings

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PPI claiming after IVA, DRO, bankruptcy

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Comments

  1. sarah says

    my partner went through a debt relief order in 2012 we have just checked his credit file and the hsbc are still marking the debt every month in default and the the account is still open no wonder he is being refused everything this page is very helpful I have copied both the template letters and I am about to send them of with a copy of his dro letter so fingers crossed they will mark it as partially satisfied and stop marking it in default every month, do you know if they have marked it in default from 2012 until January 2015 will it take 6 years from January 2015 to drop of the credit report or 6 years from the first default in 2012? Thanks website really helpful

    • Sara (Debt Camel) says

      hi Sarah, it should drop off 6 years from the first default. And this should be on or before the date his DRO started.

  2. Mary says

    This is my final year of bankruptcy and im preparing for a mortgage in 2016 – My main concern is that the main reason for my Bankruptcy was the Mortgage. I have been working with experian to get my file cleaned up , however the mortgage company wont update the default date to the date of the bankruptcy order , they did this a year after . I have wrote to the ICO and they have stated the default is right and correct and should be listed to the date of repossession and not the Bankruptcy date and therefore the mortgage wasn’t considered part of the bankruptcy… I am appealing this decision as […] Im kinda wondering why the possession date is the default date and not the actual bankruptcy date . I have read the ICO website in which this is confirmed however it doesnt say anything about the repossession date .. I guess im hoping they will review my appeal based on the fact the mortgage provider could have take the property at anytime and was a voluntary surrender

    • Sara (Debt Camel) says

      Hi Mary, it’s good that you are trying to sort this out now as these appeals can take some time. I have deleted the lengthy details you gave about your mortgage lender’s behaviour and why your house should have been repossessed earlier – I think the ICO will only be interested in whether the “correct” default date is the date of your bankruptcy or the date of repossession. As you say, published ICO guidance suggests that it should be the date of bankruptcy. If your ICO appeal is unsuccessful, then I suggest you go to your local Citizens Advice Bureau and discuss your next move there – one option may be to complain to the Financial Ombudsman about (a) the default date question and (b) the fact that your mortgage lender has not treated you fairly.

  3. Mary says

    Hi Sara ,

    Thank you so much for this , i appreciate this advice . I can’t understand the ICO’s decision focusing on the repossession date as opposed to the bankruptcy date. I will send in the appeal and get back to you,. My only fear now is when the bankruptcy is off my credit file along with the defaults when i do apply for a mortgage declaring that i was once bankrupt i might never get a mortgage anyway. I think its unfair to legally have to declare this after 6 years after discharge and the time being up but i guess thats another matter lol Thanks again for everything and i will be in contact with you for an update xx

  4. jake says

    hi, so from what you said in regards to written letters to correct your file does that appeal to DRO as well as bankruptcy? My debt relief order 12 month period ended last week and im keen to get my credit score back u. The link you included in that part with the data register i put in my details and nothing came up. Am i doing something wrong?

    • Sara (Debt Camel) says

      Hi Jake, yes the letters apply to DROs as well as bankruptcy. It’s good to be keen to correct your credit record, but if your DRO only ended last week, then you need to chill out for a bit as it will take lenders a while to update your credit records. I suggest waiting a couple of months and then checking your credit records to see if they have been correctly updated. The data register link – you don’t put your details in, you put the creditors details in – you are trying to find exactly who at the creditor to write to if they have got a date wrong.

  5. Mark says

    hi. My DRO ended 2012 when the six years are up can I run my own business ?? Do I have to get permission from courts Thanks

    • Sara (Debt Camel) says

      Hi Mark, you can start a business, including being a director, now. You don’t need anyone’s permission and don’t have to wait 6 years.

  6. allan says

    I was discharged from my bankruptcy in November 2014, I have a mobile phone contract and this is my only line of credit. Payments are mad regular and on time and my poor financial situation was a result of youth and nievity. I am now older and wiser and earn a decent wage. I want to improve my credit score in every way I can over the next few years while I save for a deposit. What are the best ways to do this while minimising risk of making things worse, I have looked into the purposely designed credit cards for people like me but according to money saving experts calculator there is only a 10% chance I will be accepted, I know that a no impedes scores. What is the best way for me to start correcting these things.

    • Sara (Debt Camel) says

      Hi Allan, do what it says in this article! Check default dates and whether all debts are marked as settled. As soon as they are apply for Vanquis or similar. If refused, wait 3 months and apply for another. This will be a slow process but so is saving a good deposit.

  7. Janet says

    Hi I was made bankrupt in 2010 and moved home 3 years ago, I recently got a copy of my credit file and noticed I have a ccj issued in 2014 for debt which was included in my bankruptcy, I sent a copy of the bankruptcy paperwork to the court to get the ccj taken off but they said it still stand, how can they do this??? Please help

    • Sara (Debt Camel) says

      Hi Janet, I’m not sure if you just sent details of your bankruptcy – you need to apply to set aside the CCJ. I suggest you contact National Debtline 0808 808 4000 who will be able to talk you through what to do.

  8. Janet says

    Hi yes I sent the court a copy of my bankruptcy paper work and they sent a letter back saying that they can see it was included but the ccj still stands until I either pay or the 6 years is up. I didn’t recieve any paper work on the ccj as I had moved and didn’t forward my address to the company in question as I thought it was all dealt with and done through the bankruptcy order, so I was shocked to discover the ccj when I have not even tried to take out credit ever since. Thank you for the number I will call them, I just wondered if it was correct that I could be penalised again for the same debt

  9. Lea says

    Hi, A family members Right To Buy their council house was denied due to her having obtained a DRO in 2011. Are the council/HA in their right to do this or does she have grounds to appeal with it being back in 2011?

  10. Joanne says

    Hi Sara
    My DRO was discharged in Sept,2014. I want to apply for Nissan finance on a car, but I do not want the embaressment of being refused. Is there any way of finding out if I will be approved first please?

    • Sara (Debt Camel) says

      hi Joanne, I’m not aware that you can do a ‘soft check’ on this before hand. Make sure you follow all the points in this article before applying to give yourself the maximum chance of being accepted, but it’s only 6 months since your DRO finished so you may well have a problem.

  11. Chris says

    Hi, I was released from my DRO around September 2012 but Provident state that the debt was satisfied as from October 2012 and have listed this on my credit rating with all defaults starting from May 2010. They say they have no evidence of the DRO even though it says satisfied on the account. But I never paid it off and they want proof. The problem I’ve got is I have misplaced my paperwork, so I can’t send them it to them to remove it from my credit file. Other than that I’ve run all my bills I.e telephone, credit cards the way it should be with no defaults and even after 2 years I’m still at the bottom with my credit rating.

    • Sara (Debt Camel) says

      Hi Chris, The difference between Sept12 and Oct12 is too small to make any difference. If all your DRO debts were marked as defaulted on or before the DRO date this is correct. Provident aren’t going to remove the debts from your credit record – they will drop off 6 years after the default date. And your DRO marker will drop off after 6 years.
      Time will gradually improve your rating. Make sure you are on the electoral roll. Keep the balance on your credit cards low – for preference pay them in full each month.

  12. Rachel says

    Hi there, my DRO started in January 2010 so my understanding is that it finished in January 2011 as they last for 12 months. I hoping to purchase my first house next year, does my DRO completely disappear from my credit rating after 6 years from the start date of my DRO or from the end date? Also which would be the best credit agency to purchase my credit file from? Hope to hear from you soon. Many thanks.

  13. Rachel says

    Hi Sara, thanks for the prompt response. So in January 2016 my credit file will be wiped clean? It will show nothing at all? No one will be able to see I have ever been on a DRO? Who are the three credit agencies, should I do that now? What do you recommend I do to start building my rating up? Many thanks

    • Sara (Debt Camel) says

      Hi Rachel, you need to check your credit files – sometimes they need to be “cleaned up” as this article describes, but basically yes, your DRO should vanish after 6 years. The three credit agencies are Experian, Equifax and Call Credit. Follow the steps in this article to start rebuilding your credit and also look at the tips in the post about preparing for a mortgage application. And get saving a deposit!

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