Basic Question about Defaults and Credit File

MyLastFiver

I've just been put in my place on another thread (thanks Fermi!) and wanted to seek clarification on a point.

I had always assumed that, whilst in breach of a credit agreement (ie not making contracted min payments), a lender could add a default to my file for every missed payment. It appears I was wrong on this, and am happy to be corrected.

I am now told that a lender only issues a default ONCE, at the date of the original default, then merely updates the default with a marker which basically means "still in default".

Does this mean, then, that regardless of whether or not the debt is paid in the meantime, the original default disappears after six years, regardless of whether the account is still outstanding? Because this sounds too good to be true!

I had always thought that my credit file would be crap for six years from the date I finally satisfied the defaults (ie paid the money back), but now it appears that defaults will disappear six years from the date the creditor logged the ORIGINAL default. Which is nice if true!

Would someone please explain in idiot language whether or not I now have it right? Because if so, it is a huge relief.

Thanks

niccatw

MyLastFiver wrote: »

I've just been put in my place on another thread (thanks Fermi!) and wanted to seek clarification on a point.

I had always assumed that, whilst in breach of a credit agreement (ie not making contracted min payments), a lender could add a default to my file for every missed payment. It appears I was wrong on this, and am happy to be corrected.

They have to let you know they are adding a default.

I am now told that a lender only issues a default ONCE, at the date of the original default, then merely updates the default with a marker which basically means "still in default".

Yup, correct.

Does this mean, then, that regardless of whether or not the debt is paid in the meantime, the original default disappears after six years, regardless of whether the account is still outstanding? Because this sounds too good to be true!

Yup, correct. It will drop off 6 years after it had been issued. It cannot be re-applied for the same debt.

I had always thought that my credit file would be crap for six years from the date I finally satisfied the defaults (ie paid the money back), but now it appears that defaults will disappear six years from the date the creditor logged the ORIGINAL default. Which is nice if true!

It's true. 6 years from date of issue, regardless of when the debt has been paid of.

Would someone please explain in idiot language whether or not I now have it right? Because if so, it is a huge relief.

Yup, you've got it right.

Thanks

Enjoy the feeling of relief .

MyLastFiver

Thanks for that!

stebiz

MyLastFiver wrote: »

I've just been put in my place on another thread (thanks Fermi!) and wanted to seek clarification on a point.

I had always assumed that, whilst in breach of a credit agreement (ie not making contracted min payments), a lender could add a default to my file for every missed payment. It appears I was wrong on this, and am happy to be corrected.

I am now told that a lender only issues a default ONCE, at the date of the original default, then merely updates the default with a marker which basically means "still in default".

Does this mean, then, that regardless of whether or not the debt is paid in the meantime, the original default disappears after six years, regardless of whether the account is still outstanding? Because this sounds too good to be true!

I had always thought that my credit file would be crap for six years from the date I finally satisfied the defaults (ie paid the money back), but now it appears that defaults will disappear six years from the date the creditor logged the ORIGINAL default. Which is nice if true!

Would someone please explain in idiot language whether or not I now have it right? Because if so, it is a huge relief.

Thanks

You are quite correct. A default can only be issued once and the sooner the better really because the 6yr rule starts then. If they delay,(theoretically they could wait to defaul you in a couple years time) it is hanging around your neck a lot longer. Hope this helps.