What happens when my DRO ends?
A DRO (debt relief order) lasts 12 months and at the end of this period you will be debt free. However, many people do not know what happens when this debt solution ends and how it impacts your current financial situation.
You will be removed from the Insolvency Register after 3 months
Once the DRO ends, your listing on the insolvency register will be removed up to three months after this date – though it could be removed quicker. This means creditors will no longer be able to see you listed on there, which can improve your chances of being accepted for credit products in the future.
You will not receive official confirmation
It’s worth noting that when your DRO ends, you don’t receive any official notification and so it’s up to you to keep an eye on its status as the 12-month moratorium period comes to an end. You will need to check the insolvency register for the end date.
We’ve delved into this more in our in-depth guide on how long a DRO lasts.
Once you’ve checked the end date and can see your listing under the insolvency register has been noted as complete, you can start looking ahead and moving forward financially. We recommend you print off a copy of the listing once it is finished as confirmation – you have three months to do this.
You can apply for credit
During the 12 month moratorium period you are restricted from taking on any credit of more than £500 without disclosing to the lender that you are in a DRO. This changes once your DRO ends.
However, it’s worth noting that you will find it difficult to get accepted for credit products, as your DRO will be visible on your credit report for six years from the date it was granted. Over time though, the chances of acceptance do increase, as you can improve your rating and prove you can be trusted with credit.
We recommend waiting until your credit rating has bounced back a little before applying for anything, as rejected credit applications can further impact your score.
You can start to rebuild your credit rating
Rebuilding a low credit rating, especially after the impact of a DRO, takes lots of time and patience. However, it can definitely be done and in the future, you will be able to enjoy necessary credit products including a mortgage to buy a home and credit cards for larger everyday purchases.
It’s a good idea to start small, taking on easy to repay credit products such as a 0% interest credit card and strictly using this to pay for things such as fuel or groceries and ensuring you pay off the total amount at the end of the month. This can help your credit rating increase steadily over time, as you prove you can borrow and make repayments over a longer period of time.
Keep an eye on your credit rating via one of the three credit reference agencies – these include Experian, Equifax and Callcredit. You will need to pay to see your credit report – this costs £2 – or you can sign up for one of the service’s credit tracking products. These vary in price so choose one that you can best afford, although Callcredit’s service Noddle is free.
Ultimately, at the end of your DRO you can enjoy being debt free. You will have adhered to strict restrictions while you were in a DRO, and now you have the opportunity to start again with your finances.