Collections & loans

Helen_A

Hi, I've got a question I hope that someone can answer more clearly than my bank!
I recently received a letter from natwest telling me my unpaid overdraft of -£380 had been passed to collections. It stated that if not paid within 28days my default would be passed to credit agencies etc. I paid it off as soon as was aware.
I rang them to see if I could now close the account & ask about how it would affect my credit rating and ability to get loans. I was told that it will appear as a collection on my credit check permanently.
I bank with nationwide, the natwest account was just a student account. Any future loans would be with nationwide.
I really don't understand as I have paid off the overdraft so why would it appear on a credit check? Is there anything I can do to remove it?
Thanks
Helen

MusicalLawyer

All accounts appear on your credit file for 6 year after the date a default is applied, or the date the account is settled and closed - whichever happens first.

Helen_A

Have I defaulted? I didn't think I had as I paid it off as soon as they wrote to me. Also the letter said that if the payment wasn't made in 28 days that my details would be sent to credit agencies but I paid well within.

fermi

Helen_A wrote: »

Have I defaulted? I didn't think I had as I paid it off as soon as they wrote to me. Also the letter said that if the payment wasn't made in 28 days that my details would be sent to credit agencies but I paid well within.

On that basis they should not have recorded a default. But it might be wise to check your reports to make sure.

As said, the account will stay on the file for 6 years from the settlement date. If you has status codes saying you were behind on payments applied before they warned of against defaulting, then they may stay visible until the account is finally removed. Not the same impact as a default though, especially after some time has passed.