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How a TPP can affect your credit file

Being on a token payment plan (TPP) will affect your credit file. This is because you’re paying less than the minimum repayment amount you agreed to when you took the debts out. These lower repayments will be recorded on your credit file.

Even though a TPP will affect your credit file, it may still make things easier if you need breathing space from creditors. What’s most important is that you keep your priority bills and other living expenses covered as best as possible.

What could be put on my credit file during a TPP?

There are several types of information that a creditor could record on your credit file. Let’s take a look at how a creditor may log things on your credit file and why:

Payment history: The payments you’ve made to your debts up to this point will have been logged on your credit file. TPP payments are less than the normal payment on a debt, so your credit history will show that partial payments are being made.

Even if a creditor isn’t happy with your token payment, it’ll still be acknowledged as a payment on your credit file.


Defaults: It’s very likely that creditors will add a default to your credit file after a few months of reduced payments. Defaults stay on your credit file for six years from the date of entry.

Court judgments and decrees: If you receive a CCJ  (England & Wales), a decree (Scotland) or a money judgment (Northern Ireland), this will be logged on your credit file for six years.

Would my TPP stop me getting a mortgage or tenancy?

Renting: Some landlords may refuse you as a tenant if you have negative information on your credit file. They can only access your credit file with your permission, and you’ll be asked to sign a form giving your consent first.

Smaller private landlords and letting agents will sometimes check public records rather than your credit file. They don’t need permission to do this, but they’ll be able to see if you have a recent history of court action or insolvency. Local authorities and housing associations are unlikely to look at your credit history.

Some private landlords or letting agents may still accept you as a tenant even if you have a poor credit history. However, you may have to find a guarantor who’ll agree to cover your rent if you’re unable to pay. Alternatively, you might have to pay the landlord a larger deposit in advance.

Getting a mortgage: If you don’t own your own home at the moment, then it’s unlikely you’ll be able to get a mortgage while on a TPP.

Remortgaging: It may be harder to remortgage when on a TPP but there could be some options available. We strongly recommend getting qualified mortgage advice if you need help remortgaging while you’re on a TPP.

Are utilities, insurance or phone contracts affected by a TPP?

Utility bills: Some utility companies may want to perform a credit check. For example, this might happen if you apply to change from a pre-payment (‘pay as you go’) meter to a credit meter where you can pay monthly or quarterly.

Car insurance: You have to undergo a credit check if you choose to pay your car insurance by monthly instalments using a credit agreement. However, because car insurance can be cancelled if you don’t keep up with the payments, you’re less likely to be refused.

Mobile phone contracts: Negative information on your credit history could make it harder to take out a mobile phone contract. Cheaper handsets with lower monthly costs may be easier to get, but this isn’t guaranteed.

Can I take out credit while I’m on a TPP?

You shouldn’t take out any further credit during your TPP. You’re not in a position to make the minimum payments on the debts you already have, so taking out more credit may make your situation more difficult.

If you have an emergency or unexpected expense, you may feel you need to borrow money. If this happens, we recommend you speak to your TPP provider. They can take a look at your budget and see if there are any resources available such as emergency grants.

If you do need to take out a new credit agreement the lender will run a credit check, and because of the impact on your credit file of making reduced payments, you may be charged a higher interest rate or refused credit altogether

Can my TPP affect the people that I live with?

Your credit file is yours alone. It won’t affect the people you live with unless you share a financial product, such as a joint loan, mortgage or household bills in joint names.

When two people are linked by credit, it’s called a ’financial association'. This means your record of making reduced payments may affect the other person’s ability to get credit.

Can I improve my credit score once my debt’s paid off?

Once your debts are repaid, your credit file will begin to steadily improve. All negative information such as missed payments or court action will ‘drop off’ your credit file after six years, even if the debt’s not fully repaid.

If you receive a lump sum of money, you may be able to negotiate full and final settlement figures on your debts with your creditors. We recommend you get advice from a settlements team first, as they can talk you through the process.

How do I check my credit file?

A number of credit reference agencies offer a free one-month trial where you can access your credit score. Further information can be found on the government website.