How long does a trust deed stay on your credit file?

How long does a trust deed affect my credit file?

Entering into a Scottish trust deed is an effective way to escape unmanageable debt, and allows for a fresh financial start once the trust deed term has come to an end. As with all official debt procedures, however, there are negative aspects that require consideration.

While a trust deed can be a great option for individuals in Scotland who are dealing with unmanageable levels of debt, there are certain factors which you need to carefully consider before entering into this type of agreement with your creditors.

One of these is the negative effect a trust deed has on your credit rating, and the potential impact on your financial situation both during the trust deed term and in the future.

While this will have a negative impact on your credit rating, so will any defaults you may have made on your existing credit agreements. For many people, their credit history is already damaged due to missing payments on their credit cards and loans long before they decide to enter into a trust deed.

What if your credit report is incorrect?

If your credit file is inaccurate it could affect your ability to borrow further into the future, so it’s a good idea to send the credit reference agencies a copy of the discharge certificate issued by your trustee.

A few weeks after you’ve been discharged from the trust deed, you should obtain a copy of your credit file from all three main credit reference agencies – Experian, Equifax, and Callcredit – to make sure it’s been updated and that the information they hold about you is accurate.

The insolvency practitioner acting as your trustee isn’t responsible for updating your credit record, and although your creditors have obligations under the Data Protection Act, you cannot always guarantee they will update the credit reference agencies on your situation. This is why it’s important to take this aspect of the process into your own hands.

The benefit of entering into a trust deed is, at the end of the process, any remaining debt is written off, giving you the opportunity to rebuild your damaged credit file and start again with a ‘clean slate.’

If you would like more information about Scottish trust deeds and their impact on your credit file, our expert team at Scotland Debt Solutions can help. By taking out a trust deed with Scotland Debt Solutions, we will ensure all phone calls and letters from those you owe money to will stop. We will take responsibility for liaising with your creditors and letting them you that you have entered into a Trust Deed, and that all further communication must go through us. We specialise in helping Scottish residents escape debt, and operate from five offices around Scotland. Call one of the team to arrange a free same-day consultation.