How Bankruptcies and CCJs Affect Your Credit Score

Updated: November 14, 2023 Author: Paul Gillooly

Quick answer: A CCJ or any type of bankruptcy or insovency will stay on your file for six years and within this six year period you will find it difficult to get credit. After this six year period you can take steps to improve your credit score.

Did you get hit with a CCJ or go through bankruptcy and are wondering how it will affect your credit score? In short, bankruptcies and CCJs stay on your credit report for up to six years, negatively affecting your credit score.

This makes it harder to get a loan, credit card, or mortgage. However, there are steps you can take so lenders view you in a more positive light and could increase your chances of using financial services. We’ll explore a few of these steps to help you make the best of a bad situation.

What Happens To My Credit Score After Bankruptcy or a CCJ?

When you go through bankruptcy or receive a CCJ, it will go on your credit file for six years. The CCJ will go on a public database called the Register of Judgments, Orders and Fines, whereas the bankruptcy will go on the Individual Insolvency Register.

You can pay off your CCJ within one month, and it will avoid being recorded on the register, which means it won’t go on your credit file. However, any defaults that led to the CCJ will go on the credit file, which any lender can see.

In any case, CCJs and bankruptcy will significantly lower your credit score and make it harder to get a loan, take out a mortgage, or even get a mobile contract. Therefore, avoiding these should be top-of-mind to keep your credit score healthy.

How Soon Will My Credit Score Improve After Bankruptcy?

Your bankruptcy will stay on the credit file for six years, which will continue to restrict your credit score.

However, by taking the right steps, you can improve your credit score over the course of around 12-18 months after bankruptcy. The extent to how much your credit score improves from each action varies, but they are all steps in a positive direction.

Once the six year period after a bankruptcy is over, the bankruptcy will be removed from your credit file. This means lenders and other parties looking at your credit file will have no way of uncovering your bankruptcy and holding it against you.

How To Improve Your Credit Score After Bankruptcy or CCJs

Here are a few steps you can take to improve your credit rating if you have recently gone bankrupt or received a CCJ:

Make repayments: If you have existing debts or manage to take out loans, then make timely repayments. Every time you pay back a loan instalment on time, it could positively affect your credit score.
Minimise loan applications: Reduce the number of loan applications you make to no more than one per 3 months. Keep in mind that getting rejected for a loan application could negatively impact your credit score.
Electoral roll: Register for the electoral roll at your current address to increase your credit score.
Verify credit details: Get a statutory credit report and ensure all details are correct. For example, if the six year period after bankruptcy or CCJ has passed and it’s still on your credit report, then you should get it removed.

Getting a Loan With Bad Credit After a Bankruptcy or CCJ

You may want to buy a home or car with financing after going through bankruptcy or receiving a CCJ. Unfortunately, many lenders may want to avoid lending your money because of your bad credit rating.

However, there are a few things you can do to increase your chances of a successful loan application, such as:

Improving your credit rating before you apply for a big loan.
Getting a friend or family member with a good credit rating to guarantor the loan.
Adding assets as collateral.
Paying off existing debt on time.
Comparing lenders to find one that offers a competitive deal for borrowers with bad credit.

Final Thoughts On Recovering Your Credit Score Post Bankruptcy or CCJ

To conclude, a bankruptcy or CCJ will stay on your credit report for six years with a negative mark on your credit score. However, during this period, you can take steps to improve your credit score and potentially get a loan with bad credit.