When does an unpaid account become technically 'defaulted'?

clhs

The reason I ask is that I obtained a copy of my credit report and score from both Experian and Equifax in February.

Both agencies reported all positives except for one account: Carphone Warehouse, for which I didn't pay my last phone bill. The fact that I didn't ever receive a bill, and knew nothing of it until I got my credit report is actually irrelevant for what I want to ask.

I was applying for a mortgage at the time, but was turned down because of this black mark on my file. My mortgage broker advised me to try again when the black mark dropped off my file: six years after it defaulted. I was lucky in that the debt was old: July 2005.

Today I obtained a new copy of my credit report from Experian and my credit is now excellent. There is no mention of the black mark from CPW (which they previously reported as defaulted on 13 July 2005, IE six years and one day ago).

Equifax, however, still show the black mark, and it's keeping my credit score quite low. Instead of the black mark dropping off yesterday, as with Experian, it shows as being "unpaid" in the month of July 2005, and then remains "unpaid" in August, and then every month until March 2006, at which point it is marked as "defaulted". Therefore I can assume that it won't drop off my file until March 2012.

This seems a bit harsh: if I failed to pay a bill in May 2005, should it not have been flagged as "defaulted" in about August 2005? I was told that three months of no payments equates to an account defaulting. Instead Equifax are simply reporting it as unpaid for eight months, thus delaying the "defaulted" flag until the following March.

Would really appreciate some help as I am desperate to sort this out and have had it hanging over me since February.

Thanks in advance.

rdchick

You might find you have to wait a month or so for it to update, Equifax updates at a particular date each month (mines around the 20th) so I'd give it a month and see what happens xxx

clhs

Thank you, RDChick. Appreciate that. I suppose I am worried, though, that they will not take it off at all until March 2012 because it wasn't until March 2006 that they deemed the account 'defaulted'. I was hoping that there was some legal technicality which means any account not paid after, say, three months, becomes "defaulted"??

rdchick

Sadly no, they are "bar-stewards" when it comes to defaulting. If the account defaults then sadly it goes from that date, thus if it defaulted today after having the account for 5 years the default will stay on your account for another 6 whole horrid years regardless of whether you pay it off or not. So yes it won't go til about March / April 2012 I'm afraid xxx

Tixy

A default is 'typically' entered 3-6months after you stop paying/go into arrears/pay reduced payments etc.

Do you have a copy of an experian report that shows a default July 05 earlier than the one on equifax?
Is the equifax default date March 2006? There should be a specific default date on the account (not just the coloured blobs/flags bit), what date is it?

There should only be one default date for the debt, which should correspond to the date a default notice was actually sent to you. The default date should be the same on both files. I would try to raise a written complaint to the creditor, asking them to correct the default date on equifax, maybe even sending a copy of the relevant part of your experian file & equifax file to help your point. To be honest getting things like this can be long-winded and a pain but its probably worth it.

clhs

Thanks, Tixy. I've just emailed Carphone Warehouse to plead for help.

Yes, the Experian report shows a default date of 13 July 2005; Equifax report it as defaulted on 29 March 2006.


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Bizarrely the report I got from Equifax back in February shows a default date of February 2006

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Tixy

Good that you've kept copies of it all. A default date is not a moveable date, its a fixed point in time and shouldn't ever change.

Good luck and you may need to keep on at them.

Scottishmummy

I have this problem with RBS credit cards. I went on a DMP in 2004 - most of my creditors defaulted then but RBS didn't default 2 cards until Dec 07 and Jan 08 so although all other defaults have disappeared from my file the 2 RBS ones will stay for just under another 2 years (5 years total in Scotland)

clhs

Well good luck to you, Scottishmummy; I hope you and I both sort out our respective problems!