How a Debt Relief Order Affects Your Credit Score

What a DRO shows on your credit file

A DRO appears in two places on your file. The order itself sits in the public information section, picked up from the Individual Insolvency Register. Each account you included then shows its own status, updated by the creditor, usually as a default dated at or before the approval date.

Three credit reference agencies hold a file on you: Experian, Equifax and TransUnion. Each builds its own copy from the data lenders send it, public records and the electoral roll, so the three are not always identical. A correction made with one agency does not reach the others, so always deal with all three.

How long a DRO stays on your credit file

The DRO entry is deleted six years after the approval date. Defaults are removed six years from their own default dates, and the register entry goes three months after discharge. Each has its own clock.

1. Approval

   The DRO is recorded

   The agencies add the order to your file. Over the following weeks, creditors update the included accounts.

2. During the 12 months

   File at its lowest

   No payments are due on included accounts, so no further missed payments should appear. Any score you see is likely to be at its lowest point, and the £500 borrowing rule applies in any case.

3. 3 months after the DRO ends

   Register entry removed

   Your entry on the Individual Insolvency Register is removed. This affects public searches of the register, not your credit file, where the DRO entry stays.

4. 6 years from approval

   DRO entry removed

   The order is deleted from your file. An account that defaulted before the DRO drops off earlier, and nothing from the DRO should remain beyond this point.

How the included debts are marked

Each included account should show as defaulted, with a default date no later than the DRO approval date, and no missed payments recorded after approval. After discharge the creditor should record it as satisfied or partially satisfied with a zero balance. "Partially satisfied" simply reflects that the debt was written off rather than paid in full. It is still a closed account.

County court judgments in the DRO

A CCJ for a qualifying debt can be included in a DRO, and the creditor cannot enforce it while the order is in force. The judgment itself is a separate public record. It stays on the Register of Judgments, Orders and Fines, and on your credit file, for six years from the date of the judgment. Because it was discharged rather than paid, it is not marked as satisfied, but it falls away on its own six-year date.

How to check your credit file for free

You have a legal right to see the information each agency holds about you. All three offer a free statutory credit report, online or by post, as often as you like. You do not need a paid subscription or a score-tracking app to see your file.

Check the file a couple of months after approval, once creditors have had time to update their records, and again shortly after discharge. Look for:

• the DRO with the correct approval date;
• every included account showing a default or settled status, with no missed payments after the approval date;
• no balance still reported as outstanding and growing; and
• no accounts or searches you do not recognise.

Getting entries corrected after discharge

Creditors do not always update accounts promptly, and debts sold to purchasers are the most likely to be wrong. If an account still shows as live or with a balance, write to the creditor with a copy of your DRO approval. Ask them to update the entry with all three agencies. If they do not respond, raise a dispute directly with the agency, which must investigate. Keep copies of everything. Our page on what happens after a DRO ends covers the paperwork you will need.

Adding a Notice of Correction

If you feel your file does not tell the whole story, you can add a short Notice of Correction with each agency. This is a statement in your own words that lenders must read if they check your file. People use it to explain that the debts arose from illness, a relationship breakdown or a loss of income, and that the DRO has since been completed. It does not change your score, but it can help where a person rather than a computer looks at an application, such as a tenancy reference.

Rebuilding credit after a DRO

There is no quick fix, and no product can remove a DRO from your file early. Treat anyone who offers to do so for a fee with caution. What helps, slowly, is ordinary financial behaviour in the years after the DRO itself.

• Make sure you are on the electoral roll at your current address.
• Pay rent, council tax, utilities and any mobile contract on time every month. Some of these are reported to the agencies and build a positive history.
• Keep your bank account in order, with no returned payments.
• If you use credit again, keep it small, use it for things you would buy anyway and repay in full each month. Refused applications leave a footprint, so only apply where you have a reasonable chance.
• Do not take on credit you do not need just to build a score.

Lenders set their own criteria. Some decline anyone with a past insolvency on file, while others take a more rounded view. Improvement is gradual and nothing is guaranteed, but a steady record puts you in a far better position by the time the six years are up.

Can you get a mortgage after a DRO?

Possibly, but not quickly. Many lenders ask on the application form whether you have ever been bankrupt, in an IVA or subject to a DRO, whatever your credit file shows. That question must be answered honestly even after the six years have passed. Lying on a mortgage application is fraud.

Some lenders will not lend to anyone with a past insolvency. Others will, particularly where it was several years ago and your record since has been clean. A mortgage broker can tell you which lenders are likely to consider you. For what the six-year entry means for renting, phones and car finance, see the advantages and disadvantages of a DRO.