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17.04.2018

Will an Administration Order Impact my Credit Rating?

When someone is struggling with a debt problem there are a number of worries and concerns that they have. Most of all, people worry about their financial future and stability. An Administration Order may be one option that could help you.

An Administration Order is a debt solution:

  • for people with a court judgement against them who are struggling to pay it
  • that consolidates your debts into one payment to the court who distribute it to your creditors
  • managed by the court so creditors no longer contact you

Your Credit Rating

In terms of financial planning, nothing is more important than your Credit Score. Your Credit Score determines your ability to take out credit as it assesses how financially stable and responsible you appear using information such as missed payments, insolvency history, and other financial records. This means that many people with debt problems have poor credit ratings. Having debt does not instantly mean that you will have a poor credit rating. As a matter of fact, to have a good credit score, you need to have taken out credit and successfully made repayments.

An Administration Order is likely to make it difficult to take out credit because it negatively impacts your credit score. This happens as the order is placed on the Register of Judgements, Orders and Fines, which credit file agencies look at when they compile your credit file. Creditors look at your credit file and credit score in order to decide if they will lend to you, and what interest rate they want to offer you. So, while it might be possible for you to take out further credit, your interest rates are likely to be high due to the Administration Order.

Your order remains on the Register of Judgements, Orders and Fines for six years, so your credit score is going to be affected by the order for those six years. If your Administrative Order is completed within that time, your record on the Register is changed so that it says that your debts have been paid. It may give you peace of mind to pay £15 to the court for a ‘Certificate of Satisfaction’.