Does a Trust Deed affect my credit rating

Will my credit rating be affected if I enter a trust deed?

There are many elements to consider when looking into any debt solution and a trust deed or protected trust deed is no different. A common question is what impact a protected trust deed will have on a person’s credit rating?

The reality is it will have an adverse effect on your credit rating as your credit file will note the fact you have defaulted on the credit you have taken out. This mark on your credit file will last for at least 6 years of which 3 years will be served as you complete your protected trust deed.

It is however worth bearing in mind that by the time you have started to explore the best debt solution for your situation it is more often than not the case that you have notes on your credit file. This will almost be a certainly if you have missed payments to your creditors. As a result your credit score and therefore credit worthiness in the eyes of other creditors will have been detrimentally affected making future credit extremely difficult to secure.

Once you have completed your protected trust deed there, in principal is no reason for you not to attain credit again .The reality is slightly different however as a mark will be visible on your credit file for a further 3 years approximately. Your credit file is the source most creditors will visit when making a judgement on whether to approve your request therefore making obtaining credit very difficult for a a period of approximately 6 years.

Once you have got through the 6 year period obtaining credit should slowly start to become easier however you may discover the terms of the loan will be less favourable than are available to people with an excellent credit rating. It is however a start and over a further period of time your credit rating can fully recover if you work at it .It is also possible by that stage to qualify and even obtain a mortgage. Ensuring your utility bills, gas, electricity, telephone etc are paid promptly does no harm either.

You should also ensure you receive a discharge document once you have completed your protected trust deed. You should make a point of sending a copy of the discharge document to all of the credit scoring agencies and ensure your credit file is noted as discharged.

This may appear a daunting prospect to enter, however to be able to answer your phone without fear of harassment calls and to return to full night’s sleep without worry it is a relatively small price to pay .In summary you can start re building you life.