Does getting rejected for credit (not a credit card) affect your credit rating?

Oxigin_2

Hi All,
Not really sure where to put this but id like to buy something on HP over 3 year apx cost of £1000 - £1500, About a year ago I have a credit card "Defaulted" (this is the only bad thing within my credit) I recently paid this card off (Nov 08) I think my credit score was around 400 before I paid it off,

My questions are
1 - Now its paid off would my credit rating ect.. be back to normal now?
2 - If I applied for HP and got rejected would this damaged my credit more ?

Thanks all (Sorry if this is the wrong forum for it)

_Andy_

1) No
2) Not really, but multiple searches would.

Oxigin_2

Thanks Andy,
1 more question, This may sound stupid but im not sure about it,
having paid off the defaulted account (via the creditors) does this mean the account is now clear and should be closed ?
Thanks again

lisyloo

1) It will stay on your record for 6 years from the point of being "settled", therefore your credit record will not be clean for a while.
The longer it goes on with good history the better your rating will be, but this will be a "mark" against you for a while.
That's the whole point of credit "history" for lenders.

2) There is nothing to say whether an application is rejected or accepted (only that a seacrh was done). So a single search will not negatively affect you.
Multilple searches in a short space of time may be assumed to be rejection and will have a negative effect.
So you need to be careful about lots of searches, but one is not an issue.

Oxigin_2

Thanks Lisyloo, Any ideas on the defaulted question ?

lisyloo

Normally credit cards are not closed simply because you pay them off.
Best thing to do would be to call the company concerned.

If it's not closed then it might be best to close it to start the "clock ticking" on removal from your credit record.

ALIBOBSY

If you do nothing the default should drop off your file after 6 years. I believe it becomes less of an issue on your file the older it gets as well.
I suspect it is likely that the account is closed as legally once a default is registered the contract is ended, so they should have closed the account already(unless they threatened a default and you cleared the balance by the date given in which case worth closing asap, but you shouldn't have an actual default listed).

I have been following a number of cases on another site (the consumer action group) where people are looking into the legality of defaults and are pursuing the removal of them. It is by no means as straightforward as charge reclaiming, but there has been some successes. Particularly if a default is partly or fully made up of charges as it can be challenged as not a "true reflection of the state of the account" which the law states it must be. Another approach used especially with older defaults is to challenge the actual serving on the default itself, very few lenders keep copies of the default and or proof of its sending and most default notices are not worded and set out exactly as prescribed in the legislation both of which can be reasons for removal.
A recent angle some are pursueing is based on the legislation regarding defaults. It is plain the original intent was for defaults to be a "holding" marker on a file and a precursor to court action, so the banks use of them without then going to court (happens alot) and then leaving them on a file for 6 years would appear to be an abuse of process. The whole point is a default has no right of challenge where court action can be challenged and defended.
Might be worth a read it is an interesting approach.

Also you can just write and ask if they will remove it given that you have cleared the debt in full ( have heard of some lenders allowing this but don't hold your breath).
Otherwise just wait 6 yrs and it will eventually drop off.

good luck
ali x

dazzaofdagenham

lisyloo wrote: »

1) It will stay on your record for 6 years from the point of being "settled", therefore your credit record will not be clean for a while.

Can you double check that.

I was on the understanding it was 6 years from the date of DEFAULT and not 6 years from the settled date..


Darren