Default on Credit Score - Paid but still chasing me

DoA_2

Hi guys,

I applied for an overdraft the other day at HSBC (who I currently bank with - and have done so for ~5 years).

I was rejected (for a student account). The girl told me I had a great BV score but my credit check came back negative. I've looked into it & basically it's an old mobile bill that I forgot 2 payments for (I was travelling at the time).

Anyway, I happen to have a friend who works at the mobile company in question.... Here is his reply

Hi there mate, just spoke with Collections. Because you've paid up, the default will still show but it should show as settled, which is positive and shouldn't affect you getting credit. What looks to be causing you the problem is that the debt recovery agency is still showing as actively chasing you for the money (despite you already paying), so I've requested they be called off. That's what will cause you the problems with getting your overdraft, because you were showing as actively in collections for so long. This should sort that out, it takes 7 to 10 days to get sorted and a further 28 to reflect on your credit file. If you have any bother, let me know and ill give you our customer services address and you'll have to submit a written complaint.

My questions are:

• Is my friend correct in what he says?
• Once this is sorted, will it really be sorted or will I still have a black mark against me?
• Would this be grounds to ask / force the debt collecting agency / mobile company to remove the listing on my file?

Again, many thanks for this great forum & your responses!

ian_h

You need to check your credit file and see what it says.

A Default is a Default - end of, whether you pay it off and it shows settled or remains being chased. They appear on your credit file for 6 years from the date of default.

Your friend seems a bit confused TBH, I interpret what he says as the fact that they havent updated the account as settled (orpartially settled), which they are now doing and will be reflected on your credit file, this may help but only marginally - its the default thats the biggy and as that DID happen you have no grounds to get it removed.

I would get your credit files (£2 each for the statutory reports from the big 3) and see what it says - although to be honest I wouldnt hold out much hope of getting a bank account with credit, you may be more successful getting a basic bank account while you rebuild your history.

DoA_2

Hi Ian,

Thanks ..... that's absolutely ridiculous! They didn't apply it for an entire year & have had 3 years of it being unsettled when it has been! Surely if there's ever a case to get something thrown out & removed then this is it!?

I also received no warning letters at all informing me that I would default.

Here is the actual default notice ... not sure if this helps or not?

http: // img832.imageshack.us/img832/3940/defaultww.png

Wallhart

If you can prove it was paid thenit should surely show as settled from the date it was settled. I'm not sure whether you mean a default was issued a year after or not. It will stay on your file for 6 years. Not sure really - I'm confused.

DoA_2

Hi Wallhart,

A screenshot of the actual default notice is above: Copy & paste the following line into a new window:

img832.imageshack.us/img832/3940/defaultww.png

I mean that I missed the payments in May 2008. I then repaid the debt (in full) in June / July 2008. The listing on my credit report shows the debt as being from 10/04/2009 (a year afterwards).

Basically what I'm saying is that every bit of information about this default notice is incorrect. Therefore surely they can be asked to remove it.

Wallhart

Mmm I'm not expert in this but I would assume you can change the date on which the settlement is made. Not sure whether it would make much difference now as it is still showing as settled.

I can't see you getting the default removed. At the end of the day you did default. When is the default showing from because it is from this date + 6 Yrs it will be removed.

I'm not sure how it can show that they are still chasing you if you have settled the debt. But I'm not expert on this subject matter.

ian_h

Hi DoA

You wont be able to get the default removed because by your own admission it DID happen so is factually correct.

The best you can hope for is for them to correct the record to update it as settled and show the correct settlement date. This may help inyour scoring but will depend on the banks criteria.

You really need to know what you are dealing with and get your credit files If you wanted to you might be able to get a "notice of correction" placed on your credit file saying why you dispute the information but there has to be factual grounds.

The fact the company didnt default for a year is sadly irrelevant, they wont go down the route of legally "defaulting" the account until they have exhausted all other collection options which can as in your case take a while, so they default date is the time they took the default step (not the date you owed the money from).

The hard fact is there is a default it WILL be reported for 6 years and you are in the process of getting to show correctly that it is settled.

Sorry its not better news, but others on here may have additional help to offer. Good luck with it though

Ian

Wallhart

p.s no offence but not willing top copy links etc as at work.

DoA_2

you need to check the default date advised in the notice

I never received any written communication that I was about to be defaulted.

Up to this point I thought I'd missed a few payments, then I repaid them & all was well. I even asked the guy at the DCA whether this would affect my credit rating and he said no.

Here is the default notice from my Experian credit rating:
http://img832.imageshack.us/img832/3940/defaultww.png

Wallhart

It will definately affect you credit rating if you have a default. Some banks may see that fact you have settled more favourably than others,

izools

DoA wrote: »

Hi Ian,

Thanks ..... that's absolutely ridiculous! They didn't apply it for an entire year & have had 3 years of it being unsettled when it has been! Surely if there's ever a case to get something thrown out & removed then this is it!?

I also received no warning letters at all informing me that I would default.

Here is the actual default notice ... not sure if this helps or not?

http: // img832.imageshack.us/img832/3940/defaultww.png

That is fine; it shows the default was paid off and is now satisfied and closed with a £NIL balance.

The reason you were having trouble with HSBC isn't because the data is inaccurate - it isn't - but because it is so recent.

A default, whether paid or not, shows a creditor you failed to keep to an agreement for several months on end with another creditor. This is viewed very negatively, even when satisfied.

As a rough rule of thumb once the default is 3+ years old it will have a lesser effect on your credit worthiness so long as you have a lot of positive information elsewhere on your credit file. If you've had no accounts whatsoever bar a bank account then you mightn't have built any positive credit history to prove to creditors you're now responsible.

You will find it helps a great deal in the future if you have at least one credit card account which you handle responsibly, take out something like a Capital One Classic card, put a small purchase on it, and clear in in full each month.

After 6-12 months of doing this, you will have built positive repayment history and shown you aren't likely to default again.

Even if T-Mobile didn't chase you for the debt for a while, the fact remains you didn't pay your bill. Your credit file reflects this fact. There is no recourse.

Good luck with this, you will recover as it is a small default, and once it is 3+ years old and you've built positive repayment history elsewhere you shouldn't find it so hard to pass a credit check.

Good luck!

EDIT: Quick facts:

1. The chap who said this wouldn't affect you is lying. A satisfied default is less negative, it's still negative
2. Mobile providers and utility providers aren't required to provide a default notice or arrears notice, as they aren't regulated by the Consumer Credit Act. It is S78(1) of the CCA that provides the requirement for a written default notice prior to the default being recorded
3. It already shows as settled - and a settled date isn't recorded. The settlement date is irrelevant, just the default date and the fact it's satisfied. Whoever suggested you need to get it corrected is wrong - the data already shows you've paid off the default