How long does bad credit last?

Below you’ll find all you need to know about how long bad credit will last for

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Bad credit is something many of us actively try to avoid, and it’s probably fair to say that nobody sets out to wind up in a situation where their credit history means they can’t borrow money when they need to. However, there are many reasons why people find themselves in this situation.

Perhaps you made some mistakes with your finances in the past, or maybe the need to pay for an emergency situation or unexpected expense one month has meant falling behind on other credit repayments or bills and you’ve been unable to get back on track. Whatever the cause, if you’re unable to remedy a negative financial situation quickly once it occurs, it will likely go on to impact your credit history and your ability to borrow in the future.

Should you find yourself in a situation where you’ve built up a negative credit history, you may be wondering ‘how long does bad credit last’? How long will it continue to impact you? Here, we’ve looked into how long different “bad credit” events may stay on your credit report and how this might impact your ability to get new credit should you need it.

Information, good or bad, typically remains on your credit report for six years, or occasionally longer. Information regarding all your credit accounts will be recorded on your credit file, so lenders will be able to see if you’ve kept them up to date – and so demonstrate your ability to manage your financial commitments well – or not.

Even if an account is now closed, your credit report will show whether it was closed in good standing, i.e. you’d made all the payments required of you on time and so closed on good terms, or if it was closed in bad standing, if you settled the account late or only in part.

Below, we’ve listed the different types of negative markers that you may experience if you do not keep your credit accounts up to date, and how long it will take for them to cease showing on your report. If you are struggling to make payments on your debt and need help, it’s important you speak to a not-for-profit, free debt advice service. We have more information here.

Type of bad credit Time it takes to be removed from your credit report
Default 6 years
CCJ (County Court Judgment) 6 years (or, if you pay the amount owed
within a month of it being issued, it will be removed)
Bankruptcy 6 years
IVA (Individual Voluntary Arrangement) 6 years
DRO (Debt Relief Order) 6 years
Late payment 6 years
  • Default – 6 years from the date the default was issuedA default is registered when you have missed one or more payments on an account such as a credit card or a loan, have not got the payments back on track, and a certain amount of time has passed.A record will be filed on your credit report to notify other lenders that the account is in default. If, after defaulting on a credit account, you pay back what you owe, the account will be marked as paid but the fact that you were in default at one stage will still be visible.
  • CCJ (County Court Judgment) – 6 years from the date it was created, unless you pay what you owe within 30 days of it being issuedCCJs are a type of court order issued by a lender who is waiting on payment from you. These do not come out of the blue and typically your account will have already defaulted before you receive a CCJ.
  • Bankruptcy – Bankruptcy will remain listed on your credit report for six years from the date it was issuedOften, the last resort for those struggling with debt is bankruptcy. Declaring yourself bankrupt effectively clears debts that you owe by using your assets – such as your home – to cover the costs. Bankruptcy is not a decision to take lightly.  It is a very serious decision as it has an enormous impact on your ability access to all manner of financial products for the period it is listed on your credit report.
  • IVA (Individual Voluntary Arrangement) – These last up to six years and remain on your credit report for six years from the date they were createdAn IVA is something that can be set up by a debt management company or a charity such as StepChange to create a formal agreement whereby they repay your creditors on your behalf, using money you pay to them. It’s important that you don’t mistake an IVA for a Debt Management Plan (DMP), as although the two ways of managing your debt are similar, a DMP is an informal agreement and so isn’t specifically recorded on your credit file like an IVA.The IVA will use your disposable income and you’ll make one monthly payment that the debt management company will then divide up among those you owe money to, with the goal of clearing your debts in five years.At the end of this period, if you still have debt outstanding you may be asked to use assets that you have, or even re-mortgage your home so that you can repay the remainder of your debt using your assets. If this is not possible you may be able to arrange to continue making payments towards your IVA for another year. However, even if you repay what you owe early, it will remain listed on your report for six years anyway.
  • DRO (Debt Relief Order) – These typically last one year but will stay on a report for sixA DRO freezes the balances of your debts for up to a year, allowing you to repay what you can during that time. Then, once the year is up, any debts still outstanding are cleared. This type of debt relief is capped at £20,000 and is typically reserved for non-homeowners with very little income or assets. Debt Relief Orders are also only available to residents in England, Wales and Northern Ireland; they are not available in Scotland.
  • Late payments – These will remain on your credit report for six years from the date the record was filedIf you make a payment towards a credit agreement late, or miss it entirely, then your lender will report this to the Credit Reference Agencies and in doing so place a “late payment” marker on your credit file. How long after your due date the payment is reported as late or missed depends on your lender: some may provide you with a grace period in which to make the payment before they report it as late.

You will be able to get credit in the future

It’s worth noting that although records of your financial behaviour stay listed on your report for a for six years, once you have resolved them, and have built a few years worth of history demonstrating that you can and will repay what you borrow, then your past will be less of a reflection on how you’re likely to manage future borrowing.

Patience is key, as is careful and small credit rebuilding over time. The goal is to demonstrate to future lenders that you are able to pay back what you borrow, and the bad credit is being overcome and firmly in the past. To start rebuilding your credit history, you could consider a dedicated credit rebuilding credit card with a low limit and that you pay back in full every month.

Our guide on how to fix bad credit can help, if you’re looking to improve your credit rating.

Representative 89% APR

Representative Example: Borrowing: £1000 for 18 months, Total Repayable: £1853.43, Total Interest: £853.43, Interest Rate (Variable): 89.9%. Rates between 9.3% APR and 1721% APR – your no-obligation quote and APR will be based on your personal circumstances. Loan term lengths from 3 to 36 months. Subject to lender’s requirements and approval.

Sunny Loans is a registered trading name of Flux Funding Limited who are a credit broker, not a lender. Loan repayment terms are 3-36 month loans.

Warning: Late repayment can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

Bad Credit Information Hub

Want to know more about Bad Credit? We’ve pulled together the answers to some of the most common questions around these loans, to help when making your decision on how to get cash for an emergency.

  • Any kind of business that you have a financial relationship with: a bank, a mortgage company, a credit card issuer, or even a letting agent is very likely to use your credit report to assess your creditworthiness before accepting your application. They will be looking to see that you have a history of making the payments required of you in full and on time.

    Evidence of the type of events like defaults and CCJs raise red flags to lenders, as they indicate that you are, or have been, experiencing financial difficulty, or will not pay them what you’re due to for another reason. This means you may find it difficult to borrow money, which might hinder you if you need to use credit for a financial emergency or for a planned purchase.

    If there’s a good reason for your having a negative marker like a late or missed payment marker on your report, such as if you were unwell and unable to work, or lost your job, you can file a notice of correction on your credit report, which is a 200 word statement that allows you to explain your circumstances. This will then be visible to other lenders who view your credit report so that they can take it into account when deciding whether to approve your application or not.

    Over time, the impact bad credit markers have on your ability to get credit will lessen.  Whilst you wait, you can become more knowledgeable about rebuilding your credit rating for the future, should you ever need to use credit, either for a short-term loan or for a longer-term borrowing need.

    Whatever your reason for having bad credit, it’s important to seek free, impartial advice from a not-for-profit debt advice agency if you’re finding it difficult to manage your finances, and find a way to clear what you owe to get back on track. The Money HelperStepChange and National Debtline are three not-for-profit services that are here to help.

  • If one of these bad credit markers is issued against you, they will remain on your credit report for six years – even if you pay back what you owe in full. This means if you’re looking to apply for a larger credit product, such as a mortgage, it may be easier to wait until the default or CCJ has dropped off your report before applying, or seek expert advice from a broker or even a free financial service – such as Money Helper or Citizens Advice.

    We’ve taken a look at how long it takes to repair bad credit in detail in our guide – take a look and find out how long it takes to clear bad credit.

Looking for further information on lending options?

Want to know more about borrowing and bad credit? Take a look at our guides below for further information.

Bad Credit Guides