Published 17 September 2026

How Does Debt Advice Affect Your Credit Score?

Credit score check and bank cards on pastel background

A question our advisors get asked a lot is: How does debt advice affect your credit score? The short answer is, it doesn’t. Getting debt advice will not in itself affect your credit score in any way.

However, it’s important to note that if you do choose to enter into a debt solution after receiving advice, this can impact your rating. But for many, a solution may be the only way to start building up a good credit score again.

Below we break down the following:

What actually affects your credit score (negatively)?
What’s good for your credit score?
How are different debt solutions recorded on your credit file?
Can your credit score improve after debt advice?

What Actually Affects Your Credit Score (Negatively)?

According to some of the UK’s biggest credit reporting platforms/agencies, Experian, ClearScore and Equifax, you should avoid or minimise the following:

Setting up new accounts or applying for credit too often: Opening a new bank account for example will lower your score temporarily, but doing it too often will mean your score won’t have enough time to recover. The same goes for credit applications because each one records a hard search (a full check of your credit report by a lender when you formally apply for finance) on your credit file.

Being close to your credit limit or missing payments: Maxing out your credit card or using an entire overdraft can demonstrate to lenders that you’re in financial difficulty. This could lead to you missing payments which, over time, could lead to a default on your credit report.

Borrowing more than you can afford: If you can’t afford to pay off your debts, you may have to enter into a debt solution. Lenders can also try to get the money you owe them by issuing a County Court Judgment (CCJ) against you, or by applying to make you bankrupt. All of which will massively lower your credit score, making it much harder to borrow money or open a bank account in the future.

Having little to no credit history: If you’ve never had credit before, you’re likely to have a low credit score because lenders like to see a history of sensible borrowing, which helps them decide whether you’re likely to pay them back on time.

What’s Good For Your Credit Score?

If you’re looking to build up a good credit score from scratch or improve (and maintain) a current one, credit reporting agencies recommend the following:

Setting up direct debits (if you can comfortably afford to pay them each month): If you can make regular payments on time via a direct debit arrangement (e.g. for a mobile phone contract or credit card), this will improve your credit score.

Staying within agreed credit limits and keeping balances as low as possible: If you owe less than the amount you’re allowed to borrow, this looks good to lenders.

Keeping old, well-managed accounts: Credit scores are partially based on the average age of your credit accounts, so try not to switch or change them too much.

Registering to vote at your current address: Lenders use the electoral register to confirm your identity and address. You can register to vote online (UK-wide) or using a paper form (in England, Scotland and Wales). There’s a different paper form if you’re registering in Northern Ireland.

Checking your credit report regularly: This won’t affect your score and is important to do on a regular basis, just to check for any errors or inaccuracies that may be affecting your score. If something is wrong, you can contact the relevant company. You can check your credit score for free using:

- Experian (Equifax data)
- ClearScore (Equifax data)
- The MoneySavingExpert Credit Club (TransUnion data)

How Different Debt Solutions Affect Your Credit File

Debt Management Plans (DMPs)

In a DMP, you will be paying less than your agreed repayments which will affect your credit score. Some lenders may also add a marker to your file to show when you make DMP payments or when you have arranged to make the payments (i.e. if any are missed).

The following will be recorded on your credit file and will remain on it for 6 years:

Missed payments
Partial payments
Defaults
Court action

The above will be removed from your report after 6 years, even if the debt remains unpaid.

Your credit score will start to look better after the defaults on your credit report have been settled or removed, provided you use credit responsibly after you complete your DMP (you should not take out credit whilst in a DMP).

Individual Voluntary Arrangements (IVAs)

An IVA will show on your credit file for 6 years from the date it begins. This will make it harder to borrow during this time, and you will have to get written permission from your IP (Insolvency Practitioner) if you want to take out more than £500 worth of credit during your IVA.

Your IVA will be listed on a public register (the Individual Insolvency Register) which is free to search for online.

Again, as long as you use credit responsibly after you complete your IVA, your credit score should start to look better due to past defaults being settled or removed.

Debt Relief Orders (DROs)

Similarly, a DRO also stays on your credit file for 6 years. During this time, you’re not allowed to take out credit for £500 or more without telling the lender that you have a DRO, which will reduce your chances of borrowing.

You will be able to open a basic bank account while in a DRO, as all banks must legally offer this to you.

Bankruptcy

Generally seen as a last resort, bankruptcy legally allows you to declare that you are unable to repay the money you owe. There is no specific minimum debt level for declaring this yourself, but if your creditors apply to make you bankrupt, you must have debts over £5,000.

This also appears on your credit report for 6 years, or until you’re discharged (if this takes longer). Taking out credit will be very difficult but if you do find someone who will lend to you, you must tell them about your bankruptcy when applying to borrow over £500. They are also likely to charge you higher interest because you are classed as a high-risk customer.

Employers and landlords may ask to look at your credit information before employing you or letting you rent a property.

Can Your Credit Score Improve After Debt Advice?

Yes. The good news is, debt advice and entering into a debt solution can gradually lead to credit score recovery.

Getting confidential and impartial debt advice from professionals is the first step. This will help you understand your options and come to a more informed decision about how to improve your financial future.

As negative credit information gets older, its impact may gradually reduce. Lenders generally prioritise more recent credit history and making regular payments towards your debts (e.g. whilst in a DMP) can demonstrate more responsible behaviour. But it is important to note that the way older credit information is treated in terms of lending decisions varies between lenders.

How Do I Get Debt Advice?

Our friendly and professional team provides free*, confidential debt advice in many different ways, so you can choose the method that feels most comfortable for you.