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How a trust deed affects your credit rating

A trust deed will lower your credit rating for several years. Here is what shows, for how long, who can see it, and what you can do.

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A trust deed affects your credit rating for six years from the date it begins. During that time any lender that checks your credit file will see it, which usually makes borrowing harder or more expensive. Your trust deed is also listed on the public Register of Insolvencies until 12 months after it ends.

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

mygov.scot and the Accountant in Bankruptcy (AiB, the public body that supervises trust deeds in Scotland) both say a trust deed affects your credit rating for six years from the date it begins. The clock starts when the trust deed begins, not when it ends. For a trust deed that runs for the standard 48 months, that means the entry usually shows for around two more years after your payments finish. If your trust deed runs for longer, check your credit report to see how the entry is recorded.

The debts in your trust deed may also show their own history, such as missed payments or a default. The Information Commissioner’s Office (ICO), which regulates how personal data is used, has said it is unlikely to be fair for a debt to stay on your file for more than six years from the date of the original default. So a default recorded before your trust deed started may drop off earlier than the trust deed itself.

Before you sign, your trustee (the licensed insolvency practitioner who runs the trust deed) must warn you that a trust deed may lead to you being refused credit, both during the trust deed and after you are discharged from it.

What is the Register of Insolvencies?

The Register of Insolvencies is a public record kept by AiB. It is separate from your credit file. Anyone can search it for free, and the entry shows your name and address, your trustee’s details and the key dates. Your details stay on it for the whole trust deed and are removed 12 months after it ends. Details can be withheld if publishing them would put someone at risk of violence.

The ICO says credit reference agencies hold information from public records, including insolvency data. See the Register of Insolvencies for more.

Can you borrow during a trust deed?

You are not legally barred from borrowing during a trust deed. Citizens Advice Scotland says it may be difficult in practice, and mygov.scot adds that:

  • new credit may be harder to get accepted for
  • new borrowing may affect your ability to keep up your trust deed payments
  • debts you take on after signing cannot be included in the trust deed, so the new lender could take action against you.

Check your trust deed’s terms and speak to your trustee before applying for any credit, including a phone contract on credit or car finance.

Some other solutions have fixed rules. During sequestration (bankruptcy in Scotland), there are legal limits on borrowing without telling the lender you are bankrupt. In a Debt Payment Programme under the Debt Arrangement Scheme (DAS), credit over £2,000 needs AiB’s approval.

Want to understand the credit impact of each option? Tell us a little about your situation and a licensed insolvency practitioner firm will call you to go through every option, including ones that are not a trust deed.

Start your enquiry

May not be suitable in all circumstances. Fees apply. Your credit rating may be affected. Free, impartial advice is available from MoneyHelper and other services.

Does a trust deed affect your partner’s credit rating?

A trust deed is personal to you. Couples cannot sign a joint trust deed, so each partner who wants one needs their own. Your partner’s credit file is not affected just because you have a trust deed.

The exception is a financial link. The ICO explains that if you have a joint account or joint credit, the credit reference agencies may link your files, and a lender assessing your partner can then look at your file as well. You should not be linked to someone simply because you live at the same address. Once a joint account has closed, you can write to the agencies and ask them to remove the link. Read more about partners, family and joint debts.

How can you check and rebuild your credit file?

Get your statutory credit reports

The three main credit reference agencies in the UK are Equifax, Experian and TransUnion. The ICO says you have the right to a copy of your file from each of them free of charge. Look for the “statutory report” on their websites. You do not have to sign up to a paid subscription to see your information.

Put mistakes right

Check that your trust deed is shown with the right dates and that the debts included in it are recorded correctly. If something is wrong, raise it with the agency and with the lender that supplied the information. If they will not correct a clear mistake, you can complain to the ICO.

After you are discharged

When your trust deed finishes and you are discharged, AiB says you will receive a certificate confirming that the debts included in it are written off. Keep it safe. The ICO’s guidance for people discharged from bankruptcy is to send proof of discharge to each lender and ask them to update their entry on your credit file. Ask your trustee whether you should do the same. See getting discharged from a trust deed.

Habits that help

  • Register to vote at your address. The ICO lists the electoral roll among the public information the agencies hold.
  • Keep up with your rent or mortgage, council tax, energy and phone bills. Most of what the agencies hold is about how you have managed credit and service accounts.
  • Be wary of any firm that charges to “repair” your credit file. Accurate information stays on your file for the set period, and you can dispute mistakes yourself directly with the agencies and lenders.

How do other options compare?

Every formal debt solution in Scotland affects your credit in some way. A Debt Payment Programme under DAS stays on your credit file for at least six years. Sequestration and the Minimal Asset Process (MAP) are both recorded on the Register of Insolvencies. A trust deed also has fees, may mean releasing equity in your home, cannot include every debt, and if it fails, creditors can pursue you again and your trustee can petition for your sequestration.

An adviser needs to look at your whole situation before any option is chosen. You can compare Scottish debt solutions and get free, impartial debt advice.

Official sources

Common questions

Can I get a credit card during a trust deed?

You are not legally barred from applying, but credit is usually harder to get while a trust deed shows on your file, and it may cost more. Any new debt you take on after signing is not covered by the trust deed, and repayments could make it harder to keep up your trust deed payments. Check your trust deed terms and speak to your trustee before applying.

Will my trust deed still show after I am discharged?

It can. The credit file entry lasts six years from the date the trust deed began, so for a standard four-year trust deed it usually shows for around two more years after the payments end. Your name is removed from the public Register of Insolvencies 12 months after the trust deed ends. Keep your discharge certificate in case you need to show it.

Can I have a trust deed removed from my credit file early?

If the entry is accurate, it will normally stay for the full six years. You can ask for mistakes to be corrected, such as a wrong start date or a debt not marked as included, by contacting the credit reference agency and the lender that supplied the information. If they will not fix a clear error, you can complain to the Information Commissioner's Office.

Will a trust deed affect my partner's credit rating?

Your trust deed is in your name, not your partner's. But if you have a joint account or joint credit, the credit reference agencies may link your files, and a lender assessing your partner can then look at yours too. Simply living at the same address should not create a link. Once a joint account is closed, you can ask the agencies to remove the link.

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