Definition of a "default" ?

kronin

Hello everyone,

About 14 months ago I got a bit slow on keeping up with repayments to a catalogue company, I missed about 3 and although I cant quite recollect what happened next, I do remember receiving a letter from a collection agency (poss. Mercers) requesting the full balance of £300 to be paid - think a CCJ was threatened. Anyway, I paid it and the account was closed.

Ive recently got credit reports from Equifax and Experian and they both state that a default was registered on this catalogue account?! Unfortunately, and rather stupidly, Ive recently thrown out a load of old letters documents and amongst those was all the correspondence from this account. But I dont remember "defaulting" on anything, I was late paying, they requested the total balance and I immediately paid it - I thought I would be in the clear!

So does that sound right to you? Would it be worth contacting this catalogue company and asking them or would they not have any info seeing as it was over a year ago?

Interestingly both Equifax and Experian state that the account was opened on the 10/03/03, settled on the 08/01/04 but was then updated on the 08/08/04 - what would that update have been? And even more interestingly, both reports state that my credit limit with this catalogue company was £999,999 !! Surely that doesnt go in my favour - should I sumbit a notice of correction?

Many thanks for your help, this is a great site!

Xbigman

If you missed a payment entirely and didn't contact them, thats a default. Especially seeing as a debt collection agency was called in I don't think you can complain too much. Your credit file should read that you defaulted but have a note stating it was paid off. Low level debt, IE average credit cards and loan companies, won't worry too much. Mortgage and more discerning loan companies will be nervous about lending to you. Sorry.
Regards


X

kronin

Thanks for the reply Xbigman.

I didn't realise missing a payment could result in a default, Ive missed the odd payment with a Lloyds CC and the worse that happened was a £30 charge! Im guessing if I was to miss 3 in a row then things would be different.

Anyway fair enough about that. Anyone have any comments on the £999,999 credit limit and why this account was "updated" 7 months after it was closed?

Thanks again.

mattp_3

Info on Default Notices can be found here:

http://www.payplan.com/questions/defaultnotice.php

kronin

mattp wrote:

Info on Default Notices can be found here:

http://www.payplan.com/questions/defaultnotice.php

Thanks for the link, guess I did default on the account then 5 years to go....

Does anyone out there have any advice on the £999,999 limit?

Debt_Free_Chick

I think that, strictly speaking, a missed payment is a default. So, as soon as you fail to pay by the due date, the lender could issue a default notice. In practice, they don't - partly due to the massive amount of work involved and partly due to the fact that we can all miss a payment through oversight, lack of organisation etc. In these situations, the lender will just record the payment as "late" if it is made soon after the due date. Some lenders are more generous than others and, provided you contact them, will allow "months" for a missed payment to be made up.

Note though, that for your credit record to show a default, the lender MUST issue a statutory default notice. No notice, no default.

And the default stays on your credit record for 6 years from the date it is registered (shown on the default notice) no matter what you do. The account will be marked as satisfied if you do make up the payment.

The lender can, in theory, remove the default from your file, if you satisfy it. But, in practice they don't, unless there are very good reasons for doing so and you persuade the lender to remove it. Don't believe any of those agencies who claim to "clean" your record and get defaults removed. You'll just part with money and find they can't do anything!

HTH

kronin

Thanks for the info. Debt_Free_Chick

When you mention that lenders can remove the default if theres a good reason, what sort of reasons could a person give? What would be the best way to go about contacting them, ring or write a letter?

Anyone out there had a default removed? How did you do it?

purple_2

generally a default would not be registered by a catalogue for a couple of missed payments, i work in debt collection and the catalogues we deal with allow their customers six months of missed or incorrect payments before they would register a default, once its registered it will stay there for 6 years from the date it was applied, and as far as i'm aware experian update their records every 28 days so it will be recorded if you make regular payments and will also update once the debt is satisfied.

Its very unlikely that the company who resistered the default would reomve it unless there was a genuine error when it was recorded, your credit file reflects how you have run your account with whatever company it is, unless there was an error in the default being registered very few companies would remove them,you may want to write to them but i seriously doubt it will get you anywhere. Your best bet would be the notice of correction if its stopping you getting credit

stuwilky

I used to work as a Customer Service Manager for GUS, we allowed three missed payment before defaulting the account.
At three months we also defaulted accounts where insufficient payments had be made without agreement.

Fairly often we did receive paid up accounts back from the debt collectors, and allowed them to order with a low credit limit (usually £50).

Debt_Free_Chick

What would be the best way to go about contacting them, ring or write a letter?

As purple says, there would normally have to be some error or fault on the lender's part. IMO, a notice of correction is not worth a bean for a properly incurred default. Moving house, being ill, changing jobs etc .... these are all situations where it's possible to maintain payments, so they won't count for much on your notice of correection.

From the information provided, it looks as if this was a "proper" default and I'm afraid you'll have to live with it.

stuwilky

Debt_Free_Chick wrote:

From the information provided, it looks as if this was a "proper" default and I'm afraid you'll have to live with it.

Or try and negotiate a return to the catalogue company. They might accept the account back on a "pay as you shop" basis rather than on credit terms. Depending how they do it this could remove the default - although it might be described as "clutching at straws", but its worth a bash.