When is a default a real default?

Starbuddy

I've missed the last two payments on a loan because of changing my bank details and this morning I've recieved a strongly worded letter from the loan company saying Default and requesting that I pay the arrears within 14 days.

Does this mean a default has gone on my account already? It does say "steps will be taken to register this Default Notice with the Credit Reference Agencies in 28 days time".

I have the money to pay the arrears now but I'm worried that I've ruined my change of switching mortgage providers next year when my inital low interest rate ends!

Anyone help ease my confusion?

file_wizzard

Starbuddy wrote:

I've missed the last two payments on a loan because of changing my bank details and this morning I've recieved a strongly worded letter from the loan company saying Default and requesting that I pay the arrears within 14 days.

Does this mean a default has gone on my account already? It does say "steps will be taken to register this Default Notice with the Credit Reference Agencies in 28 days time".

I have the money to pay the arrears now but I'm worried that I've ruined my change of switching mortgage providers next year when my inital low interest rate ends!

Anyone help ease my confusion?

Sounds like you have received a “default notice” , rather than it being notice of a registered default.

Most company’s use internal; default notices to highlight that you are in breach of the original T&C’s of your agreement.

These are generally used to focus peoples minds into paying the outstanding amount before the situation is escalated to the next level for account termination, and finally debt collection.

Whichever way you look at it then it is still a serious breach and should be dealt with as soon as possible.

Also regardless of whether a “registered default” has been entered with the CRA’s you will probably find that they have reported the late payments. Whist this is not a show stopper as far as a mortgage go’s, it will obviously have a negative impact.

Entrepreneur_en_faillite

Most lending institutions issue a nasty letter like this as a preamble to registerring a default with the credit reference agencies.

The best thing to do is to call them, pay the outstanding and ask them to confirm that they have not registered detrimental information on your credit file. Make sure you get the name of the person you spoke to, and make a note of the day and time you called.

to find out what has been registered you can go to https://www.experian.co.uk and download the forms or get the telephone number to apply to get your credit reference agency file. You can also go to https://www.equifax.co.uk and get the information that their agency holds against you, in fact for a fee you can download the file immediately

Points to note:

1) It may take a few weeks for the lender to register information
2) The information held by Equifax is often different from that held by Experian so it is ceratinly worth getting copies form both agencies.
3) If you feel that the information is incorrect there is an appeals process whiach is free. Please avoid companies offering to 'repair' your credit as credit repair is a myth, anything they can do for you for a fee, you can do yourself for free!

mattp_3

hi,

this should clear up most of your questions about default notices:

http://www.payplan.com/debt-library/debt-management-default-notices.php

Regards
Matt

ali82

Hi, does a company officially have to send you out a 'default notice' and give you the option of settling the balance within a set period of time before defaulting the account?

I am battling with 3 mobile at moment to get my default removed from my file as they did not send me a notice and I thought my debt was written off (explained in a previous thread), I was unaware for 5 months until I obtained my file!

digp

Entrepreneur_en_faillite wrote:

1) It may take a few weeks for the lender to register information

not always, some companies have direct access to the experian database to *add* information immediately!