Student loan advice

gabymum

Hi
I defaulted in my student loan some time back but have been paying regularly via Clarity for some years. I am now down to the last £295.00 but have just received a letter saying that if I don't pay the remainder immediately (I pay £100.00 per month) that it will now show as a default on my credit record.

I could probably squeeze it on a credit card but am loath to do so because the interest rate will be far higher than a student loan - but I don't want this stuck on my credit file for years.

Any suggestions?

Also, when did the rules change about student loans showing on credit records. I don't know how I missed it as I'm a regualar moneysavingexpert watcher.

tippytop

It's up to you but a default stays on your credit file for 6 years and will affect your ability to get credit in the future. for the sake of a few hundred quid i would probably pay it. Just make sure you pay off you card as quickly as you can to avoid .

onlypaddy

i may be wrong here but I thought you couldn't get two defaults on the same debt? If thats true then its an empty threat....just tell them to get stuffed and keep paying as you are, it'll be gone in a few months.

Check if im right though first...

fermi

When did you originally default on the loans?

The SLC can now report to the credit reference agencies, but they must follow the same rules and principles as other creditors who wish to do so.

If in reality if you defaulted years ago, then they shouldn't now be reporting a recent default. To do so would be recording inaccurate and misleading information about you, and as such would breach the Data Protection Act.

fermi

This is what the regulator/ICO has to say........

From: Technical Guidance Note - Filing defaults with credit reference agencies

Time framework

Although there will be some flexibility in the definition of a breakdown, we believe there should be general rules for the minimum period of arrears which should exist before a default can be filed. Equally there should be a maximum period after which, if anything is to be recorded with a credit reference agency, a default must be filed. The following are in line with the practices currently adopted by most lenders.

• Accounts should not be routinely filed as being in default where full payments or those due under a rescheduled agreement are fewer than three consecutive months in arrears.
• Accounts should normally be filed as being in default where those payments due have not been received for six months.

This time framework only relates to filing defaults. It does not affect the lenders’ ability to continue to report accurately on the extent of arrears using monthly status codes. We recognise that may not always be appropriate for products which advance credit over either a very short or very long-term.

gabymum

Hi
Have now rung SLC who say that I have been sent this letter in error. Makes you wonder how many people have just panicked and paid up though.

fermi

Good news then.