Will A Trust Deed Affect My Credit Score?

Many people who are in the position of considering a Trust Deed often feel that they’ll never want to borrow money or get into debt ever again. But asking whether entering into a Trust Deed will affect your future credit is still an important question.

The short answer is yes, entering into a Trust Deed arrangement will have negative implications on your credit rating, but the chances are if you’re in financial difficulties already it has already been affected.

During the period you are actively in the Trust Deed, you will not be able to obtain any credit over £250 without first informing the creditor about your Trust Deed.

Once your Trust Deed has finished, it will remain listed on your credit file for a further three years, which will in turn make it more difficult to obtain credit for this period – although certainly not impossible.

However, on the plus side, once your Trust Deed period is over, your credit report will also show that all your outstanding debts have now been cleared – something that probably wouldn’t have happened had you not entered into a Trust Deed arrangement in the first place! On the contrary, it is likely your debts would have continued to grow due to interest and charges.

So basically, although a Trust Deed does damage your credit rating, it can be far less damaging than alternatives such as sequestration, or simply doing nothing. More importantly, six years after your Trust Deed starts, your credit rating will contain no further mention of it – or of the debts you’re currently dealing with today!

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About Trust Deed.org

TrustDeed.org was launched to help provide debt information and guidance for people living in Scotland.

We know that being heavily in debt can significantly affect your quality of life. But TrustDeed.org aims to help to relieve some of the burden by giving you the right tools and information you need to begin reducing your monthly repayments.