The Impact of a Debt Relief Order on Your Credit Rating

Do you have experience with a debt relief order? Perhaps you’ve had one before. If that’s the case, then you know that it can severely affect your credit rating, which won’t enable you to make any credit in the future.

A debt relief order will affect your credit score. If you do have a debt relief order, the official receiver thereof, won’t be allowed to inform your bank thereof, unless they are listed as one of your creditors. Some banks, however, will check whether their customers have been provided with a debt relief order.

If they do find out you have a DRO, they may freeze your account, and for those who are more lenient, may request that you open a new bank account.

The importance of your credit rating

Once you apply for a loan or any single form of credit, your credit provider will check your credit reference file, which will provide them with enough information, to see whether you may be at risk to repaying debt.

Your credit rating will be influenced by personal financial details, including your role in managing your existing credit commitments, your existing bank accounts, whether, or not, you’ve had your house repossessed before, and anybody you are financially linked to.

Does a DRO affect your credit file?

Your DRO will appear on your credit reference file and m/ay reduce the chances of you getting credit from lenders altogether. Since it shows your records of a possible history of making bad payments, it is important to analyze before providing anybody with credit.

Even though most creditors will reject giving you loans, if you have a DRO, there may be some lenders that will still take the chance of offering you credit. A note regarding your DRO, however, will remain on your credit file for up to six years after it has been initiated.

It will also affect your chances of opening a bank account, during the period of a DRO, and, for an extended period thereafter. DRO’s can affect your chances of obtaining something as simple as a lease on an apartment.

Considering how many aspects it may affect in your life, it is yet another reason why it is important to keep up with your debt and ensure that you’re not taking on more than you can handle.

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