Paying Things Off Early, Better For Credit Rating?

Leon_Telford

All,

Had a 'Home Learning College' loan for a course, was £48 a month till August this year.

However rang up and paid the whole lot last week.

Does things like this help or wreck my score?

Also does a default last for six years? Not got one though.

Regards

FireWyrm

Paying off a debt early...nope. It's nothing but good news.

Defaults remain on your file for 6 years until they are spent...is there something specific you are worried about?

Leon_Telford

Just an unsecured loan, not bad yet but unable to make the arranged payments however we are working together so hopefully won't go to that stage anyhow, I'd imagine a default is simply when you refuse and ignore them?

Leon_Telford

Also sorry, I've lent from some payday lenders as been short, however paid them off on time.

This boost it?

I presume everytime I 'pay off' a debit (regardless of any trouble paying it in the past which of course would of affected at that time) it helps my rating?

MusicalLawyer

Leon_Telford wrote: »

I'd imagine a default is simply when you refuse and ignore them?

No. A default can be given when you 'default' on the original agreement. If you end up paying less than your loan repayments each month (I think it's 6 months) then they can default you. Then it will be on your credit file for 6 years from the date of the default.

Also, with regards to Payday Loans - these don't look good on your credit file whether they're paid off on time or not, as it shows you cannot manage your money. Yes, it's good that you've paid them off on time - much better than the alternative.

Leon_Telford

What happens when I default? Other than six years on my credit file.

MusicalLawyer

It will say in the T&C's of you loan exactly what they will do, but it is likely that they would add a default charge on to the balance.

If you stopped paying it altogether, they could go to other County Court and obtain a CCJ against you. I think they stay on your file for 6 years after that's been settled.

Leon_Telford

Not stupid enough to stop paying all together, that just be daft. So no way of a CCJ IF im paying?

MusicalLawyer

Leon_Telford wrote: »

Not stupid enough to stop paying all together, that just be daft. So no way of a CCJ IF im paying?

Some people on here are - so was just informing you

I don't think they can issue a CCJ etc if you're paying, albeit smaller amounts, as I'm sure that is a 'last resort' to make people pay and even then people only pay what they can afford. However, I am not 100% sure so don't take my word for it... just incase!

Leon_Telford

Cheers for the advice. Leon