Does Breathing Space Affect Credit Score

Does Breathing Space Affect Credit Score

If you're struggling with debt, the idea of taking a break from creditor pressure can be a relief. That’s exactly what the Breathing Space scheme is designed to offer — a temporary pause in debt enforcement, interest, and charges while you work on improving your financial situation. But many people wonder: does entering Breathing Space affect your credit score?

The short answer is: Breathing Space does not directly affect your credit score, but the debts you’re dealing with — and how they’ve been managed — can already have an impact. While Breathing Space itself is not recorded on your credit file, the circumstances surrounding it may still influence how lenders view your financial situation.

This article explains what Breathing Space is, how it works, and what effect it can have on your credit report and borrowing ability.

What Is Breathing Space

The Debt Respite Scheme, commonly known as Breathing Space, was introduced in England and Wales in May 2021. It provides individuals in financial difficulty with legal protection from most types of creditor action for a limited period.

There are two types of Breathing Space:

1. Standard Breathing Space

• Lasts up to 60 days

• Offers protection from interest, fees, court action and enforcement

• Must be arranged through a debt adviser

• You must continue making payments if you can

2. Mental Health Crisis Breathing Space

• Offers the same protections as standard Breathing Space

• Lasts for the duration of treatment plus 30 days

• Open only to people receiving mental health crisis care

• No need to keep making debt payments during this period

Breathing Space is designed to give you time to work with a professional adviser and consider a long-term debt solution, such as a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), or Debt Relief Order (DRO).

Is Breathing Space Shown on Your Credit Report

No. Breathing Space is not recorded as an entry on your credit report with Experian, Equifax or TransUnion. Lenders cannot see that you’ve entered into the scheme.

However, your existing credit situation — such as missed payments, defaults, or County Court Judgments (CCJs) — will still appear on your report if they happened before or during Breathing Space.

So while the Breathing Space itself does not hurt your credit score, it also does not erase any damage already done by unpaid debts.

How Creditors Are Affected During Breathing Space

Once Breathing Space is in place, creditors must:

• Stop charging interest and fees

• Halt collection activity and enforcement

• Pause any legal action

• Freeze further contact about the debt

However, they can still update your credit file during this period to reflect the true status of your account. For example, if you miss payments during Breathing Space, these can still be recorded as late or missed payments on your report.

Can Breathing Space Improve My Credit Score

Breathing Space does not improve your credit score directly. It simply pauses creditor enforcement to give you time to find a long-term solution.

To improve your score, you’ll need to:

• Address the underlying debts

• Begin or continue making regular payments

• Avoid taking on new unaffordable credit

• Stick to a debt solution that helps reduce what you owe

Once you’re back on top of your finances and can make payments consistently, your credit score can begin to recover.

Real-World Example

Liam entered Breathing Space after falling behind on three credit cards and a personal loan. The scheme protected him from creditor calls and court action for 60 days, during which he worked with a debt adviser to set up a repayment plan. Although Breathing Space didn’t affect his credit score directly, the missed payments and defaults that had already occurred remained visible. After six months on his new plan, he saw gradual improvements in his credit file due to on-time repayments and lower balances.

Will Lenders Know You’ve Used Breathing Space

No. Credit reference agencies do not record Breathing Space participation as a separate marker. However, a lender might assume you’ve used some form of debt help if:

• You’ve recently paused payments

• You’re on a debt management plan

• Multiple accounts show defaults or missed payments within a short timeframe

Even without a specific Breathing Space marker, lenders will still assess the overall state of your credit history.

What Happens After Breathing Space Ends

Once the 60-day period ends, creditors can resume contact, charges, and enforcement if no new arrangement is in place. To protect your finances and credit score longer-term, it’s important to:

• Enter into a formal debt solution, if needed

• Stick to any repayment plan agreed with your adviser

• Start rebuilding your credit profile through responsible borrowing

• Continue checking your credit report for updates

How to Rebuild Your Credit After Breathing Space

• Make all future payments on time

• Keep credit card balances low relative to your limit

• Register on the electoral roll

• Avoid applying for too much credit too soon

• Use a credit-builder credit card or other low-risk financial tools

Over time, positive credit behaviour can help restore your score, even if past debt issues remain visible for several years.

Final Thought

Breathing Space does not affect your credit score directly, and it is not recorded on your credit report. However, it also does not repair any existing damage caused by missed payments or defaults.

If you're struggling with debt, Breathing Space offers a valuable pause in pressure and a chance to regain control. Use this time wisely by seeking debt advice, exploring long-term solutions and preparing to rebuild your financial stability step by step.