A Brief Guide to Credit History ‘Black Marks’

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What You Need to Know

  1. It is possible to receive a default notice, or even a CCJ without realising it if you ignore the notices that are sent to you.
  2. If you receive a default notice, you can avoid having it appear on your credit file by making full payment of all monies owed in the timeframe specified. Likewise, a CCJ that is fulfilled within one month can be excluded from your credit report.
  3. If you fail to make a prompt payment, both default notices and CJJs will appear on your file for six years.
  4. Even though they remain on file, you can have a note added to CCJs that take you more than a month to pay to clarify that they are ‘satisfied’.
  5. Bankruptcy will also have a lasting affect on your credit file. Though you may be discharged from bankruptcy in just one year, your credit score will be affected for at least six.
  6. If you fail to comply with the terms of your bankruptcy agreement, you could make matters even worse. A Bankruptcy Restrictions Order will remain on file for a full 15 years.
  7. If you become bankrupt, it’s advisable to add a note to your credit file to explain the situation, especially if various debts may have all been dealt with under a single bankruptcy agreement.

Whilst all lenders have a different set of criteria for deciding whether or not to grant credit to any particular individual, there are certain factors that are likely to have a negative influence on their decision. By understanding what your credit history may contain, how it got there and how long it will remain on file, you can avoid making unsuccessful applications for loans and credit cards, which can help prevent further damage to your credit history.

Here we guide you through the ins and outs of some of the major ‘black marks’ that may appear on your credit file.

Default Notices


What Are They?

A default notice is a formal letter stating you that you’ve failed to pay a debt as you’d agreed to. This is much more serious than a reminder, or even a final reminder. They’re usually only issued after multiple missed payments and can be the precursor to more serious action such as the pursuit of a CCJ or an attempt to have you declared bankrupt.

They will outline the action the creditor requires you to take and allow 14 days for you to respond and attempt to come to an arrangement. If you can’t repay, the services provided by the creditor will most likely be cut off, though they won’t necessarily pursue any legal action that may have been threatened.

How Could I Get One?

Falling behind with payments on any form of debt regulated by the Consumer Credit Act could lead to a default notice. Bear in mind that you could receive a default notice without knowing it. The creditor only has to send it to your last known address for the note to be valid.

How Long Will It Affect My Credit Score?

Default notices stay on file for six years. If you meet the demands of the notice by repaying all monies owed within the specified timeframe, you can ask the lender or the credit reference agency to remove it from your file. If you fail to do this, it will be on record.



What Is It?

CCJ stands for County Court Judgement. This is where a creditor seeks the backing of a court to recover money you owe them. A CCJ is essentially a legal order to pay back what you owe, outlining how and when to pay it.

How Could I Get One?

If you’ve failed to repay a debt, have ignored final notices or failed to come to an agreement with a person or company you owe, they will send a notice threatening to pursue legal action. This could be a default notice, a ‘letter before action’ or notice of a court claim. If you don’t respond to such a notice, the creditor can then start proceedings leading to a CCJ. Some people believe they could not have received a CCJ as they’ve not been taken to court. This is a mistake. You will simply receive notice of a court claim or a CCJ in the post. If you ignore such a notice, a CCJ can be issued, even if you’ve not acknowledged the situation.

How Long Will It Affect My Credit Score?

CCJs are recorded on the Register of Orders, Judgements and Fines for six years after the judgement is made. This information will be available to lenders during that time and is likely to figure into their considerations (CCJs are generally considered a severe hindrance to obtaining credit).

If you pay off the debt within a month of the order being made, you can have the order removed from the register all together. (To do this you’ll need to pay a £15 court fee and send proof of payment.)

If you pay off the order after this time, you can have it marked in the register as ‘satisfied’. This means that, though it will still be on file for six years, those looking will be able to see that you’ve paid the debt, which could potentially improve your chances of securing credit.



What Is It?

Bankruptcy is where you are made legally insolvent. This status grants you protection from creditors who are looking to recover debts and can provide a quicker way to clear a serious debt problem that you cannot afford to otherwise pay off.

Though you will be discharged after a year assets, including possessions such as your house and car could be taken from you and distributed amongst those that you owe. You will also have restrictions placed on you during your bankruptcy which will place serious limitations on your financial freedom. Your spending will be monitored by administrators and beyond basic allowances, your earnings will have to be used to pay your debts. Bankruptcy could also impact on your professional life as you will be unable to hold certain positions.

How Could I Be Declared Bankrupt?

You could apply for bankruptcy yourself if you’re unable to pay your debts. However, if you owe more than £750, a creditor can also apply to have you declared bankrupt. This is normally a last resort as, under the terms of a bankruptcy, creditors usually have to agree to settle for less than they’re owed.

How Long Will It Affect My Credit Score?

Though you may be discharged in just a year, bankruptcy will have a long term affect on your credit history. It will stay on file for at least six years and though you can add notes to your file to show that a variety of debts were all dealt with under a single bankruptcy from which you’ve been discharged, lenders may still be able to see details of the individual debts. If you break the terms of your bankruptcy by hiding assets or seeking to obtain credit using false information, you may receive a Bankruptcy Restrictions Order which will remain on your credit report for 15 years.

Some lenders may ask if you’ve ever been bankrupt, which renders the issue of how long it stays on file irrelevant. Though it is by no means impossible to rebuild your credit rating after bankruptcy, it’s important to understand that there are lasting repercussions and that it is not a quick-fix way to write off debts.

Further Reading

  • Before you make any major application you should take a look at your credit file to ensure there are no nasty surprises. A credit check form Credit Expert will allow you to see if everything is in order.
  • If you do have negatives such as those listed above on your credit file, don’t despair. Our guide to improving your credit score contains tips on how you can set things moving back in the right direction.
  • IVAs provide an alternative to bankruptcy, but will also have an adverse affect on your credit score. You can find more information here.
  • There are still options available to you if you have been refused credit so read our comprehensive article on the subject.

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