What impact will a DAS have on my credit rating?

The Debt Arrangement Scheme, or DAS, is a government-backed debt solution available to residents of Scotland who are struggling to repay their unsecured debts. It’s intended to allow for repayment of the monies owed without having to enter full insolvency, but despite this, it does still have an adverse impact on your credit file.

So let’s look at how your credit rating is affected by entering into a DAS, and what you can do to rebuild your credit score once the arrangement has been successfully completed.

How can a default affect your credit rating?

Any form of borrowing default is recorded on your credit file and negatively impacts your credit rating. Even when you repay your debts in full, as you would with a Debt Arrangement Scheme, the effect on your credit file is the same because you haven’t been able to meet the original contractual obligations you entered into with the lender/credit card provider.

So what does this mean in practice? Well, upon entering into a DAS, your credit file will be negatively affected for a period of six years, and during this time you will find that your borrowing capacity is severely restricted.

How can you rebuild your credit rating following a DAS?

Once you’ve successfully made your final repayments towards your debts, the first step is to make sure the Debt Arrangement Scheme is marked as ‘satisfied’ on your credit file. If this has not been updated, you can contact the credit reference agencies (CRAs) and make a ‘notice of correction.’

It’s advisable to check your credit file with all three major CRAs in the UK - Experian, Equifax, and TransUnion - as they may hold differing information on you. Being on the electoral role and using a credit-builder credit card may also help you build up your credit file and help you secure borrowing in the future.

If you would like more information on DAS and the impact on your credit rating, please contact Scotland Debt Solutions. We specialise in helping Scottish residents escape debt for the long-term, and can provide free help and advice to help you better understand your options.