Rebuilding credit after a Trust Deed

When your Trust Deed actually clears

A Protected Trust Deed stays on your credit file for six years from the date it started, or until the date it ended if that is later. The gap after discharge is an opportunity: it's exactly the window to build positive history, so when the mark finally drops off, your file isn't blank.

You've spent four years making regular payments. You're already good at the habit that rebuilds credit.

First, check your file is right

Once you're discharged, send confirmation of your discharge date to the three credit reference agencies (Experian, Equifax and TransUnion) so each included debt shows as satisfied or settled, not still outstanding. Your trustee applies to the Accountant in Bankruptcy for your discharge using Form 5 and must tell you the date you were discharged.

Creditors don't always update your file promptly, so it's worth chasing. Each agency must give you your statutory credit report free of charge, so you can check what's recorded.

An accurate file is the foundation everything else builds on.

Why an empty file is its own problem

When the marker has gone, your file can still be empty if you've done nothing in between, and lenders can't trust what they can't see. The years between discharge and the mark clearing are when you build the track record lenders will see once it has gone. The free basics below are where to begin.

The steps that work

• 1. Get on the electoral roll. It confirms your identity and address, which lenders check routinely. Free, at gov.uk.
• 2. Use a credit-builder card carefully. Small purchases, paid off in full every month, kept well under the limit. Used this way it builds positive history; carried as a balance at high interest, it's a step backwards. A tool, not a lifeline.
• 3. Pay everything on time. Set up direct debits so nothing's ever missed. A clean run of on-time payments is what lenders look at.
• 4. Keep your credit use low. Stay well under any limit you're given. Using a small fraction looks far better than running close to the max.
• 5. Space out applications. Each full application is a hard search, and several close together look like you're struggling.

While your Trust Deed is still running

There's no legal credit limit in a Trust Deed, but check your deed's terms with your trustee. Any new debt isn't included in the Trust Deed. Come back when your Trust Deed has finished.

What to expect

There's no instant fix. Consistent, on-time habits steadily improve your file, even though the mark itself stays until six years from the start date, or until the date it ended if that is later. You don't have to wait for it to clear to start moving forward.

Mistakes to avoid

• Doing nothing until the mark clears: when the marker has gone, your file has nothing recent to show.
• Assuming the six years runs from your discharge: it runs from the start date, unless your Trust Deed ended later than that.
• Carrying a balance on a builder card instead of clearing it in full each month.
• Not telling the credit reference agencies you've been discharged: debts can wrongly show as outstanding.