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How Long Does Bad Credit Stay on Your Credit Report?

Bad credit is generally a result of negative financial habits. If you have missed payments, a default, or a County Court Judgment on your credit report, one of the first questions you may have is: when will it disappear?

Six years is the key period for several types of negative credit information, but the date that period starts from is not always the same.

But that does not mean every problem disappears exactly six years after you first miss a payment, and it does not mean you should ignore a debt until the entry drops off your report. The six years is generally from the date they were recorded.

Different records have different starting dates, and what happens after you repay a debt also matters. 

 

What information appears on a credit report?

Your credit report is a record of information that credit reference agencies hold about you.

In the UK, the three main consumer credit reference agencies are Experian, Equifax and TransUnion.

Your report can contain information about:

 

A lender can use information from one or more credit reference agencies alongside its own lending criteria when deciding whether to accept an application.

There is no single UK-wide credit score that every lender uses.

 

How long do missed payments stay on your report?

Missed or late payments can remain on a credit report for up to six years.

One late payment does not necessarily have the same effect as repeatedly missing payments, but it can still be visible to lenders during that period.

If you realise a payment has been missed, bringing the account up to date as soon as you reasonably can is normally better than allowing further arrears to build.

If the missed payment has been recorded incorrectly, contact the lender and the relevant credit reference agency rather than waiting for the entry to disappear.

 

How long does a default stay on your report?

A default normally remains on your credit report for six years from the default date.

Paying the debt does not normally make the default disappear early. Instead, the record should be updated to show that the debt has been satisfied or settled.

A settled default still shows that there was a previous problem with the account, but it also shows that the debt has subsequently been dealt with.

 

What happens if the debt is sold?

A lender may sell an unpaid debt to a debt collection company.

That should not restart the six-year clock on the original default.

The debt should not suddenly look like two separate defaults with different dates simply because another company has taken over collection.

If you believe an old debt has been given a newer default date incorrectly, check the information with the credit reference agencies and raise a dispute if necessary.

 

How long does a CCJ stay on your credit report?

A County Court Judgment normally remains on the Register of Judgments, Orders and Fines for six years.

If a CCJ is more than six years old, it will normally disappear from the register even if it has not been paid.

There is one useful exception to know about.

If you pay a CCJ in full within one month of the judgment, you can apply to have it removed from the register.

If it is paid after that first month, it will usually remain for the six-year period but can be marked as satisfied.

Because court judgments can have significant consequences, get proper advice if you are unsure what a judgment means or how to deal with it.

 

What about bankruptcy, IVAs and other insolvencies?

Many insolvency records also remain on a credit report for six years from the date they are recorded.

This can include:

  • bankruptcy
  • Individual Voluntary Arrangements
  • Debt Relief Orders
  • protected trust deeds in Scotland

 

Some insolvency information can remain for longer.

For example, some bankruptcy restrictions can continue for longer than six years. Certain information can remain for longer where extended restrictions apply.

If you have been through a formal insolvency process, it is worth checking your credit reports once it has finished to make sure accounts are being reported accurately.

 

Does paying a bad debt remove it?

Paying the debt will not usually remove the record straight away.

If you repay a debt that has already defaulted, the default itself does not normally vanish immediately.

What should change is the way the account is shown on the report.

The balance may show as settled or satisfied, depending on the circumstances.

This gives a future lender a more accurate picture because it shows that the account was eventually dealt with rather than left outstanding.

 

Why six years?

Credit reference agencies generally retain consumer credit information for six years as an industry standard.

That does not mean every single item on a credit report lasts six years.

Hard credit searches tend to stay for much less time, typically around 12 months.

So it is worth checking the type of entry rather than assuming every item follows the same timetable.

 

Will my score immediately improve when something disappears?

Not necessarily.

Removing an old default or CCJ can improve the information available to lenders, but your current credit profile still matters.

A lender may also look at:

  • your recent payment history
  • current balances
  • how much credit you already use
  • recent applications
  • income and expenditure
  • affordability
  • its own lending rules

 

Lenders also use their own criteria, so the same credit report can lead to different decisions.

An old record disappearing can help, but it does not guarantee that a future application will be accepted.

 

Check all three credit reports

If you are waiting for an old entry to disappear, do not assume all three credit reference agencies hold exactly the same information.

Check all three reports rather than relying on just one.

You have the right to request the information held about your financial standing by the credit reference agencies free of charge.

Look for:

  • incorrect late-payment markers
  • accounts that do not belong to you
  • wrong balances
  • old addresses
  • duplicate defaults
  • accounts that should show as settled
  • financial associations that are no longer relevant

 

If something is genuinely wrong, contact the organisation that supplied the information and the credit reference agency.

 

Avoid applying repeatedly while repairing your credit profile

If your report already shows recent problems, making several new applications in quick succession is unlikely to help.

A full credit application often creates a hard search.

Several hard searches in a short period can reduce your score and may suggest to lenders that you are seeking a lot of new credit at once.

Whereas an eligibility checker uses a soft search, it can give you an indication of your chances without affecting your score in the same way.

Always check what type of search will be carried out.

 

Do not wait six years to deal with the underlying debt

Knowing that information eventually drops off a credit report should not be confused with the debt itself disappearing.

There can still be consequences for unpaid debts, including collection activity and possible legal action.

If you are struggling to keep up with several debts, free debt advice can help you understand your options.

The more useful approach is to deal with the underlying debt and make sure the information on your report is accurate, rather than simply waiting for the six years to pass.

 

What can you do while negative information remains?

A damaged credit report can be frustrating, particularly if the original problem has already been resolved.

But your credit profile is not frozen for the whole six-year period.

Continue making current payments on time, keep your details accurate, avoid unnecessary applications and check your reports occasionally for errors.

Older negative information gradually becomes part of a wider and more recent financial history.

 

We hope this article has helped explain how long different types of bad-credit information can remain on your credit report. Remember to visit us again soon at Loans 2 Go for more straightforward guides to borrowing, credit and everyday money.

This blog/article provides general information only and does not constitute financial advice.