Bad Credit History, Made Easy

May 16, 2018 Icon 4 mins read
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‘Bad credit’ refers to the major red flags on your credit file. But what counts as bad credit? If you have an unfavourable credit history, you have a poor track record of repaying debts. No judgment, life doesn’t always go the way we plan, and money matters can get out of hand. Failure to make the payments can lead to severe dents to your creditworthiness. This can come in the form of bankruptcy, individual voluntary arrangements (IVAs), county court judgments (CCJs) and/or defaults. They all form the Bad Credit factor in the Credibble Lender Report.

Here’s how lenders calculate your bad credit:


If you’ve been bankrupt in the past six years, you may struggle to borrow. However, within 12 months of discharge, lenders start warming to you. Bear in mind that if you’ve been recently discharged, you are still likely to pay high interest rates and may only be accepted for small credit limits or loans. As time passes, and you rebuild your creditworthiness, you can show lenders that you can now manage credit more responsibly and access lower rates on borrowing.

Individual voluntary arrangements (IVA)

If you’ve had an IVA in the past six years, it will have a negative impact on how lenders see you. Having an IVA won’t stop an application for credit, but lenders will be wary of lending because you’ll be seen as very high risk. Again, lenders will take a look at the time since your discharge. If this was quite recent, you might find it difficult to borrow at all. The longer the time between your IVA discharge and when you apply for credit, the easier it will be to borrow on cheaper terms.

County court judgments (CCJ)

Having a CCJ has a negative effect on your credit file. A CCJ is a type of court order that can be taken against you if you fail to repay the money you owe. It is a strong warning sign to lenders that you’ve struggled to repay a debt, especially if this was quite recently

If you’ve had any CCJs registered in the past six years, lenders will look to see whether you’ve satisfied it. In other words, whether you paid back what you owed. An unsatisfied CCJ looks worse to lenders, as it suggests you’re still struggling financially. A satisfied CCJ will tell lenders that you are in a better place financially and aiming to rebuild your credit. As with IVAs and Bankruptcies, lenders will check how recent these were. The more recent your CCJ is, the less likely it is you’ll be accepted for credit now. Lenders finally assess the balance of each CCJ. Lenders are less phased by a single small amount which has been satisfied. But if you have multiple CCJs for large outstanding balances, they may feel you are irresponsible with your finances and decide you are too much of a risk to lend to at this time.


If you’ve defaulted on a payment in the past six years, this too can negatively affect your credit file. Lenders will look at the number of defaults on your file, the total balance, and the time since your last default, if applicable. They are sizing you up to see if there is a persistent problem, or if it was a one-off.

You can use a Credibble account to find out where you stand with your credit and track your improvements. Your Credit Report shows you a clear breakdown of your credit file. You can at a glance exactly how lenders will view you. Plus, our smart Score Booster will give you practical tips tailored to your unique situation.

So, remember, if you have bad credit history, don’t panic! Yes, lenders will see you as high risk if you have bad credit against your name. But with a bit of time and effort, you can repair your credit and improve your borrowing chances with Credibble.

You can sign up for less than £10 a month here.

Last updated by Robert Edwards, May 2022

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Claire Ben Chorin

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