do i need to pay the balance on this defaulted credit card?

strung_out_2

i was very bad with money while i was at uni, meaning that various overdrafts and credit cards went unpaid, built up with charges, defaulted and eventually got sent to debt collection companies. last year, i managed to get them all paid off, apart from one where lloyds tsb agreed to take £800 instead of £1150 to close the account.

i'm finally starting to get to grips with my credit history and have been ordering credit reports to check what i can improve, what needs looking at, and what i'll just have to put up with until they drop off in 4 or 5 years time. the lloyds credit card account where i settled for £800 is showing as defaulted, with a balance of £350...

unfortunately, i seem to have lost the letter from lloyds with the details of the agreement, but they're not chasing me for the money and as far as i'm aware, the matter is now closed.

should i phone them up and offer to pay the remaining money? should i just ignore it and wait for it to drop off my credit history? would it improve my credit rating particularly if i did pay it off? experian currently rate my credit as 'fair' at 733 out of 999. i'm planning on applying for a career development loan next year, so would like my report to look as clear as possible.

skintdad

any default on your credit file will have a negative effect. fully satisfied defaults will look better than those that have a negotiated reduced settlement. vanquis for one tend to decline if unsettled defaults showing

CLAPTON

when do your defaults etc drop off your credit files?

salau2

strung_out wrote: »

i was very bad with money while i was at uni, meaning that various overdrafts and credit cards went unpaid, built up with charges, defaulted and eventually got sent to debt collection companies. last year, i managed to get them all paid off, apart from one where lloyds tsb agreed to take £800 instead of £1150 to close the account.

i'm finally starting to get to grips with my credit history and have been ordering credit reports to check what i can improve, what needs looking at, and what i'll just have to put up with until they drop off in 4 or 5 years time. the lloyds credit card account where i settled for £800 is showing as defaulted, with a balance of £350...

unfortunately, i seem to have lost the letter from lloyds with the details of the agreement, but they're not chasing me for the money and as far as i'm aware, the matter is now closed.

should i phone them up and offer to pay the remaining money? should i just ignore it and wait for it to drop off my credit history? would it improve my credit rating particularly if i did pay it off? experian currently rate my credit as 'fair' at 733 out of 999. i'm planning on applying for a career development loan next year, so would like my report to look as clear as possible.

With defaults that are not due to 'drop off' for 4 or 5 years any loan you get (unlikley) is likely to be at a much higher APR than standard.

izools

strung_out wrote: »

experian currently rate my credit as 'fair' at 733 out of 999. i'm planning on applying for a career development loan next year, so would like my report to look as clear as possible.

Given that Experian rate me as "902 - Good" out of 999, and I have six defaults and a discharged bankruptcy order on my credit file I wouldn't imagine you with 733 would stand a chance in hell of being approved for a CDL.

I was declined for a CDL years ago prior to my bankruptcy with perfectly good credit and no defaults / late payments.

Whilst LTSB mightn't be chasing you for the money, you should do what ever is required to have that default marked as satisfied (£NIL balance) on your credit files.

As it stands I'd be surprised if you're approved for even a Vanquis card.

Get the £350 paid off, once it shows as settled, apply for a Vanquis card to rebuild your credit rating.

Once you've held that for a few years you might be in with a chance of approval for a CDL, so long as all other aspects of your application are spot on.

Good luck! :beer:

strung_out_2

i've just been approved for a capital one credit card, so will be working to rebuild my credit rating right away.

technically, i could pay off the £350 immediately, but would it be better if i arranged to pay the remaining balance on a monthly basis?

Tixy

strung_out wrote: »

technically, i could pay off the £350 immediately, but would it be better if i arranged to pay the remaining balance on a monthly basis?

No it would be better (for your credit file) to pay it all off straight away and have the default marked as satisfied.
A satisfied default will always look better than an outstanding one.

Curr946

LTSB should mark your account as settled, as they agreed to take part payment in full and final settlement (or at least thats what your impression was) and if they fail to correct your file inform them you would like it raised as a complaint. If after exhausting the complaints process, contact the finical ombudsman. Id say you have a 99% chance of having your file corrected without having to pay the remaining £350.

izools

Curr946 wrote: »

LTSB should mark your account as settled, as they agreed to take part payment in full and final settlement (or at least thats what your impression was) and if they fail to correct your file inform them you would like it raised as a complaint. If after exhausting the complaints process, contact the finical ombudsman. Id say you have a 99% chance of having your file corrected without having to pay the remaining £350.

Absolutely, it is indeed worth going through their complaints procedure as having that hanging over you is going to keep you very firmly sub prime for many years yet...

Well done on your approval for a Capital One card; use it wisely. But don't take it as an indicator your credit is "fine" :beer: