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Debt service cover ratio = cash available for debt ÷ annual repayments — a core lender affordability test.
Step 1: resolve the mark
Deal with the underlying issue: pay and satisfy any CCJ, clear the defaulted debt where you can, and make sure your credit report reflects the resolution accurately. A satisfied mark reads far better than an outstanding one. See disputing a CCJ.
Step 2: re-establish a payment record
Rebuild the positive history that offsets the default. Use trade credit and small facilities that report to the agencies, and pay every one on time. Each on-time payment adds a fresh, positive line. See building business credit.
Step 3: let time do its work
Defaults and CCJs lose weight as they age and as good behaviour accumulates around them; most fall off after about six years. You do not have to wait that long to borrow — you have to demonstrate you are a different risk now. See the credit timeline.
Step 4: lead with affordability
While credit recovers, a strong cover ratio can carry an application. Present clean bank data and a clear affordability case to a lender that assesses the whole business. See borrowing with adverse credit.
Show you can afford it now
Use the calculator to demonstrate current cash cover, whatever the history.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Frequently asked questions
How do I recover business credit after a default?
Resolve the mark by satisfying any CCJ and clearing the debt, re-establish a positive payment record with reporting trade credit and small facilities paid on time, and lead with strong affordability while credit recovers.
How long does a default affect my credit?
A default or CCJ stays on the register for about six years, but its weight fades as it ages and as fresh good behaviour accumulates. You can often borrow before it falls off by demonstrating you are a different risk now.
Can I get finance while recovering from a default?
Often yes. A strong cover ratio and clean recent bank data can carry an application with a lender that assesses the whole business, even while an old default still shows on the file.
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