Home » Knowledge Hub » Quick Guides » How is your credit rating affected by bankruptcy

How is your credit rating affected by bankruptcy

Published: 08 May 2024

Person looking at credit rating on mobile showcasing bankruptcy and your credit rating

Find out exactly how your credit rating will be affected if you go bankrupt. Surprisingly, it may not be as bad as you think.

Use this guide to discover everything you need to know including how to repair your credit file after bankruptcy and how long you have to wait until you can borrow again.


What happens to your credit rating when you go bankrupt?

After you go bankrupt, a record of your bankruptcy will be automatically added to your credit file by the credit reference agencies. Your credit score will become much worse as a result.

Until your credit rating begins to repair, you are very unlikely to be able to get new forms of credit because you will fail most (if not all) lenders’ credit checks.

The record will remain on your file for 6 years from the start date. After this time, the reference agencies automatically remove it.

During the year you are bankrupt, you can’t borrow money in the form of a bank loan or credit card and it is unlikely you will get store credit. In addition, suppliers may refuse you for credit related applications such as a new mobile phone contract or pay monthly insurance.

How can you improve your credit rating after bankruptcy?

Your credit rating will not be 100% clear until the credit reference agencies remove the record of your bankruptcy from your file. This will happen 6 years from the start date.

However, you don’t have to wait this long to start getting credit.

Realistically, there is nothing you can do to repair your credit rating while your remain bankrupt. However, you will normally be discharged after 1 year. There are then actions you can take to improve your credit rating straight away.

Doing these will mean you will be able to start borrowing again sooner.

The Insolvency Service will delete your record from the Individual Insolvency Register after the date you are discharged. It will then take 3 months for the change to be visible on the register. Once your record is no longer visible on the register, start doing the things below.

There is no way you can remove the record of your bankruptcy from your credit file any earlier than 6 years from the start date.

improve credit rating after bankruptcy

Confirm the status of your old accounts

Get a copy of your credit file. Check the status of all of your old accounts that were written off by your bankruptcy.

These should now be updated to say “partially satisfied” thus confirming that the balance is no longer owed.

Where this is not the case, you can escalate to the lender’s data controller and request the change.

Review and CCJs and defaults recorded on your credit file

Check your credit file for all CCJs and default notices.

If any lenders have issued these after the date of your bankruptcy, contact their data controller. They are legally obliged to change the issue date to no later than the date of your bankruptcy.

Doing this will ensure that no negative records remain on your file after the record of bankruptcy is finally removed.

Start using a credit repair credit card

After your record has been removed from the insolvency register, you should be successful in applying for a so called credit repair credit card.

Your chosen card provider will give you a small credit limit to begin with. Start using this for everyday expenses. But remember to pay it off in full at the end of each month. This way you will avoid expensive interest charges.

Taking this action will mean that you start to build up a history of responsible credit usage on your credit file. In time, this will make it more likely that more lenders will start to offer you more forms of credit such as bank loans.

Typical credit repair cards include:

  • Capital One
  • Aqua
  • Vanquis

Only start taking the actions described above after the Insolvency Service has removed the record of your bankruptcy from the Individual Insolvency Register.

credit repair credit card

Is going bankrupt worse for your credit rating than other debt solutions?

You might think that there could be nothing worse for your credit rating than going bankrupt. In fact this is not the case.

Affect on credit rating – IVA compared to bankruptcy

Starting an IVA has the same effect on your credit rating as going bankrupt. This is because just like bankruptcy, the credit reference agencies add a record to your IVA to your credit file which remains there for 6 years.

The record of the IVA on your credit file will mean you will fail potential lenders checks and not be able to get new forms of credit in exactly the same way as if you were bankrupt.

In terms of the time it takes to repair your credit rating, arguably you are better off going bankrupt. The reason for this is you can then start the repair process immediately after you are discharged.

Within 2-3 years of the start date of your bankruptcy, you are likely to be able to have bank loans and credit cards if you wish because of the improvements which have already been able to make to your credit file.

This is not the case with an IVA. If you use this type of debt solution, you have to wait until the Arrangement is completed (which normally take 5-6 years) before you can start repairing your credit rating.

Affect on credit rating – Debt Management Plan compared to bankruptcy

Unlike bankruptcy, if you start a debt management plan, a record of the Plan is not recorded on your credit file. However, your credit rating will still be negatively affected.

Your creditors are likely to issued default notices against you (following their standard process). These will be recorded on your credit file and as a result your credit rating will become poor.

The record of a default notice stays on your credit file for 6 years – the same length of time as bankruptcy. As a result, you will struggle to borrow from main stream lenders for at least this length of time.

How long after going bankrupt can you get a mortgage?

The first thing to understand is that it is possible to get a mortgage after going bankrupt. You are not somehow blacklisted from buying a property forever.

That said, you need to be prepared to be patient. This is because as a rule of thumb, You will only be able to start thinking about getting a mortgage 2-3 years after the start date of your bankruptcy. And then only with a sub-prime lender.

Sub-prime lenders do charge relatively high rates of interest. As a result, if you do take a mortgage with one of these providers, your repayments will be relatively expensive.

You will need to wait longer to get a mortgage from a high street lender (such as a high street bank or building society). This is because, generally speaking, these lenders will not consider you until the record of your bankruptcy has come off your credit file (6 years after the start date).

Getting a mortgage in the future will be no easier if you use an IVA. Even if you settle the Arrangement early, you will not be able to get mortgage with a main stream lender until the record has come off your credit file – 6 years from the start date.

If you want a mortgage within 6 years of going bankrupt, you can initially agree a deal with a sub-prime lender. You can then switch to a cheaper product after the 6th year when your credit file is clear.

mortgage after bankruptcy

Can you still pay your mobile phone and utility bills if you are bankrupt?

Despite the affect on your credit rating, going bankrupt will not affect your current mobile phone contracts or utility accounts. These will remain running.

Utilities when bankrupt

You can continue to use the same utility supplier(s) after you go bankrupt. This is because they should not be affected by your poor credit rating. As long as you maintain the ongoing payments they will probably never find out.

If you have any utility arrears in your name, your bankruptcy will write these off because they are unsecured debts. The supplier will change the balance of your account to zero. You then start paying your normal monthly payment.

Mobile phone when bankrupt

After you are bankrupt, you can continue to pay your mobile phone contract. The fact that your credit rating is poor does not affect this even if you are paying for your phone itself on a monthly basis.

The only time you may face an issue is if you want to switch to a different provider. Because your credit rating is poor, it is likely to mean that you will fail their credit check. The answer to this is to pay as you go until your credit rating starts to improve.

Car insurance when bankrupt

Your car insurance should not be affected by your bankruptcy. You simply maintain your monthly car insurance payments.

If you need to renew your car insurance during the year you are bankrupt, you need to tell the insurer you are bankrupt. This is particularly the case if your premium is more than £500 and you want a facility to pay monthly. The pay monthly facility is a form of credit. You can use it as long as the insurer is aware of your situation.

   Written by James Falla

Share this post

Request a confidential call back to discuss bankruptcy

This field is for validation purposes and should be left unchanged.

or call us on: 0800 180 8012

bankruptcy guide tick as bullet point

Completely FREE advice

bankruptcy guide tick as bullet point

Confidential conversations

bankruptcy guide tick as bullet point

Expert help always at hand

We've helped 1,000s of people get back on track with their finances.

Speech quotes

“James, you were simply fantastic. You guided me through the process perfectly. Your manner with me was impeccable and I could not have wanted more. From the very first meeting I made you aware of my condition which can affect my understanding and you took it upon yourself to make sure I understood the options that were available to me, but more importantly, which options were appropriate for me.

The feeling of relief that this chapter of worry is behind me is down, in the most part, to yourself – had you not been so approachable, I likely would not have felt comfortable discussing my situation with you. The services you offer, and more importantly you, have put at ease the most extended and worrisome years of my life. Thank you”

Dan N

July 9, 2024

Speech quotes

“Hi James

Thanks again for your help. I know I may be hard work, but I really appreciate all your help.  I’m not sure I could have survived without you (in the literal sense). The service you offer to those going through difficult times really is life changing.

Thanks again.


Dan P

July 5, 2024

Speech quotes

“This was a very smooth process. The company was very compassionate with my needs and very supportive”

Vickie G

June 20, 2024

Speech quotes

“Had some really good debt advice from James Falla. He is really helpful. He personally went through my situation and gave me the best advice. really appreciated.”

A Lawson

June 15, 2024

Speech quotes

“I used James’s service in 2020 when I declared bankruptcy. His help was great, especially during times when I didn’t know what I was supposed to do.

Now, I had to deal with the last part of the whole experience, removing the charge from my property. James was again, extremely helpful, guiding me in the right direction and suggesting the right things to say. The charge was removed and my final offer was much lower than what they wanted me to pay initially.

Thank you very much James! A true professional that I can’t recommend enough.”

MV Faur

June 10, 2024

Speech quotes

“James, I cannot thank you enough for the hand holding and support you gave during the beginning, middle and end of the bankruptcy process. Without your assistance and support I would have literally gone mad stir crazy!!! As you are aware I will recommend your service to anyone in my position in the future.”

Doug A

June 6, 2024

Speech quotes

“Very clear and concise information. Excellent communication. Happy with all aspects.”

Nathan B

June 4, 2024

Speech quotes

“James Falla has been extremely helpful, with my application I did, for bankruptcy. He certainly did put my mind at rest, when I had questions, which I needed answering. This has certainly made the application a lot smoother, for me.”

Shelley T

May 23, 2024

Speech quotes

“James Falla supported and guided me through one of the toughest times of my life. He gave me clear advice and his service meant that I could rest assured, knowing that my insolvency application was being handled with the utmost expertise and professionalism. I am now the other side of my bankruptcy with savings and well managed credit that is gradually repairing my credit rating. Contacting Wilmott Turner was absolutely the best decision I made at that time. Thank you James.”

Anton C

April 30, 2024

Speech quotes

“I highly recommend Wilmott Turner Financial Services. James Falla has been amazing with total support, help and advice. From day one, he explained the process of my bankruptcy from start to finish and nothing was too much for him to help with. I am now discharged from my bankruptcy after 12 months and I’m overjoyed and stress free. I highly recommend anyone with financial distress to contact James.”

J Jones

April 18, 2024

Speech quotes

“After first speaking to James Falla he has put my mind at ease and helped me thoroughly with the process of going bankrupt. The service he has provided me has been exceptional and I am very happy I have had his support and knowledge to help me with the whole process.”

Ben T

April 9, 2024

Speech quotes

“Great advice and support during my bankruptcy. I will share your services with others. Thank you!”

AB Patrice

April 2, 2024

Speech quotes

“James Falla was fantastic. From start to finish he explained everything very clearly. Can’t thank him enough for what he did.”

Hannah R

March 27, 2024

Speech quotes

“James has been absolutely brilliant, he really knows his stuff and has helped me in finding the best debt solution for my own personal circumstances. I was in a very dark place before I found James, and he helped me see that there was hope and light at the end of the tunnel. He didn’t judge and doesn’t just read off a script! I don’t know where I would be now without him. A very heartfelt thank you and I would definitely recommend him.”

Natalie B

March 19, 2024

Speech quotes

“James, I wanted to take a moment to express my deepest gratitude for your invaluable support and guidance throughout the process of resolving my complex financial situation.

I cannot emphasize enough how much your professionalism and friendliness meant to me during this challenging time. Your willingness to listen attentively to my concerns and provide prompt, thorough responses to my inquiries alleviated much of the stress I was experiencing.

Your openness and transparency throughout the process were greatly appreciated and helped me feel reassured every step of the way.  I wholeheartedly recommend your services to anyone facing similar challenges. Your support has made a significant difference in my life.”

JB Mafa

March 13, 2024

Speech quotes

“From my initial enquiry, looking for advice in a very difficult situation was made so easy by the expertise and knowledge of James Falla. James was always at the end of the phone to reassure me, answer my questions and offering advice, even at the weekends!

His support and guidance throughout the whole bankruptcy process has been invaluable and reduced any stress and anxieties and helped me sleep at night and not worry.

The fees are very fair for the level of support & advice provided, and a small price to pay to know you’ve done everything right. Thank you James! Sarah.”

Sarah M

March 11, 2024

Speech quotes

“Hi James, Thank you for your advice. I’m at the end of my IPA agreement.  I can’t thank you enough. Thank you.”

Paul B

March 4, 2024

Speech quotes

“James Falla really helped me get through a very difficult time. He guided me through the process and was with me at every step. Personable and professional, I strongly recommend he and his services.”

Nav G

March 1, 2024

Speech quotes

“I have received exceptional service from James Falla. His knowledge and guidance through a very stressful time has been exemplary. He has continued to provide advice and support throughout my insolvency period.

Without a doubt he has provided excellent value for money and I would very much recommend his services. I would not advise going through any of the available debt processes without his help.”

J Sharp

February 21, 2024

Speech quotes

“I’m thankful for James Falla’s wonderful support through the bankruptcy process. I recommend his services to anyone in financial difficulties. Thanks.”

Joel Boah

February 20, 2024

Speech quotes

“Hi James, I’m really so relieved about the result of your help with my bankruptcy. Now that I’ve had a short while for it to sink in, I know it really is going to change my life! Your absolute confidence and support throughout the whole procedure, carried out over just a few weeks was really great. I couldn’t have managed very well on my own and would definitely have got bogged down with it all. Your fee has been worth absolutely every penny.

Although it was obviously my mismanagement which caused all the problems, I’d arrived in a position which I couldn’t cope with and you’ve helped me totally deal with it.

Many thanks again! A fresh start as they say, which can happen at any age : )”


February 15, 2024

Speech quotes

“Thank you to James Falla for your invaluable help in taking the stress away from a very difficult situation. Your help with my bankruptcy has been amazing and I appreciate everything you’ve done for me.”

Ian E

February 14, 2024

Speech quotes

“James Falla has helped me tremendously through what has been one of the most daunting experiences of my life. He answered all my questions and offered reassurance when necessary.

For anyone who is facing or considering bankruptcy, I urge you to make the call to James. You will not regret doing so.”

Paul A

February 1, 2024

Speech quotes

“Very pleased with the service and advice, would highly recommend. Makes and stressful experience manageable. Having James Falla to talk it all through with really helps.”

Elly O

January 22, 2024

Speech quotes

“Hi James. Thanks again for all your help with my bankruptcy, you’ve been worth every penny and some!! I’d have been in a right pickle without your assistance. You’ve been so much help through this depressing time. 2 more weeks and I will be free of this bankruptcy and can start moving forward with my life. Thanks again mate 👍🏻”

Ben R

January 15, 2024

Speech quotes

“Hi James, thanks very much for your message about my discharge from Bankruptcy, that really good news.

I would like to sincerely thank you once again for your help, you made a very stressful situation much more bearable for both myself and Sue, and of course should the requirement arise I won’t hesitate to recommend you.”

Paul T

January 5, 2024

Speech quotes

“James Falla is a great guy who explained everything to me in a simple and easy to understand way. I was able to get in touch with him quickly when I had any concerns. Everything with my bankruptcy happened just as he had predicted. Absolutely great services from him and of course the company. Outstanding.”

Steven H

January 3, 2024

Speech quotes

“James has been absolutely fantastic and helpful throughout the whole pross. He has been an absolute hero.”

Johnathan N

November 29, 2023

Speech quotes

“James Falla was brilliant. He talked me through everything and made the whole bankruptcy process stress free and easy to understand. I’d highly recommend his service to anyone in need going forward in the future.”

Brian B

November 9, 2023

Speech quotes

“Hello James. Thank you for the confirmation of discharge from bankruptcy, it feels good to have that weight off my mind. I’d like to thank you personally for making it a lot less scary than I imagined! Your service and down to earth manner was refreshing and dispelled any anxieties I had about the whole process. I have, and will continue to recommend you as a Financial Advisor if I hear of anyone in the same position as I was. I wish you all the best in the future, and if I need further assistance, you’ll be the first port of call. “

Gerry C

October 30, 2023

Speech quotes

“Hi James, Hope you are well. Thank you so much for your help last year, I honestly couldn’t of done it without you. You solved all of our problems and made things a whole lot easier. I dread to think what our situation would be now if we hadn’t of gone through the bankruptcy process! Thanks again!”


October 25, 2023

Speech quotes

“Fantastic service from start to finish. Most professional and helpful company I’ve ever dealt with. James Falla made the bankruptcy process feel easy and comfortable. Thank you for all your assistance.”

David E

October 19, 2023

Speech quotes

“James Falla was really pleasant and friendly to talk to and there when needed. Any questions answered. I would definitely recommend his services.”

S Smallwood

October 9, 2023

What we can do

Piggy bank floating in water with coins. Losing savings. Unstable economy, recession concept.

Assistance with going Bankrupt

  • Application form completed correctly
  • Preparation for Official Receiver interview
  • Ongoing 12 month support


Pink piggy bank with eyeglasses and calculator

Self Employed Bankruptcy

  • Business income and expenses forecast
  • Bank account advice
  • On-going support with 3 line accounts


Piggy bank with question marks to represent questioning whether to switch from an IVA to Bankruptcy.

Switch from IVA to Bankruptcy

  • Help with cancelling IVA
  • Support through bankruptcy process
  • On-going support during bankruptcy 
Financial Money Advice. Saving In 401K. Piggybank Deposit

Support if Already Bankrupt

  • Completion of PIQB questionnaire
  • Preparation for OR interview
  • Assistance with OR info requests