Does council debt affect your Credit Rating?

Hello Friends

The council overpaid me once on my housing benefit (a long time ago). I have paying back £21 per month for years. I still have something like £5K to go.

The debt is interest free. Does it in any way affect my credit rating?

Any clarification would be greatly appreciated.

Thank You.
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Comments

  • lee111s
    lee111s Posts: 2,988
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    Does it show up as a debt on your credit file?
  • Ciwan
    Ciwan Posts: 186
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    No idea! Damn file hasn't arrived from Experian yet. If it does show, then it is a Yes right?
    Only Student Loans to get rid off (Plan 1)
  • National_Debtline
    National_Debtline Posts: 7,998
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    Hi Ciwan

    The housing benefit overpayment shouldn’t show on your credit file unless the council took action in the county court to recover it.

    The fact that you have the monthly expense of paying it back could be factored into a lender’s decision to lend you money though.

    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • skyshadow
    skyshadow Posts: 98
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    Ciwan wrote: »
    No idea! Damn file hasn't arrived from Experian yet. If it does show, then it is a Yes right?


    I had a magistrates liability order against me and such things do not show on your credit file UNLESS the council go to the county court to enforce this.

    I can appreciate how letters from the court can be difficult to separate but if it helps set your mind at rest a County Court Judgement is as the name suggests from the County Court, a magistrates liability order is something less powerful and not on your credit file.

    If the council haven't gone down the magistrates route then this is just an agreement for you to pay back some money and not a bona fide credit agreement and again wont show.
  • Ciwan
    Ciwan Posts: 186
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    Thanks SkyShadow, it has been so long that I can't remember whether it was down the magistrates court or not.

    I guess I'll find out soon when the credit report arrives :)
    Only Student Loans to get rid off (Plan 1)
  • Ciwan wrote: »
    Hello Friends

    The council overpaid me once on my housing benefit (a long time ago). I have paying back £21 per month for years. I still have something like £5K to go.

    The debt is interest free. Does it in any way affect my credit rating?

    Any clarification would be greatly appreciated.

    Thank You.

    It probably won't affect your credit rating. But shouldn't you be more concerned with paying off this debt before worrying whether it will impinge on your credit rating and ultimately your chances of getting further into debt?
    "There are not enough superlatives in the English language to describe a 'Princess Coronation' locomotive in full cry. We shall never see their like again". O S Nock
  • sourcrates
    sourcrates Posts: 28,717
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    At the moment, council debts do not appear on your credit file, unless a CCJ. Has been obtained.
    However the recent trend to record utility bills information, makes me think it will not be long in coming.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,380
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    Ciwan wrote: »
    Hello Friends

    The council overpaid me once on my housing benefit (a long time ago). I have paying back £21 per month for years. I still have something like £5K to go.

    The debt is interest free. Does it in any way affect my credit rating?

    Any clarification would be greatly appreciated.

    Thank You.
    Ciwan wrote: »
    Thanks SkyShadow, it has been so long that I can't remember whether it was down the magistrates court or not.

    I guess I'll find out soon when the credit report arrives :)

    If a HB overpayment had gone down the court route, it would have been COUNTY court, i.e. a ccj.

    I see a lot of HB overpayments but very few of them ever go to ccj. A ccj only appears on your credit report for six years, whether or not it is paid off.

    I'd be really surprised if you find anything.

    But I'd agree with Sourcrates about the direction things are heading
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