Credit refernce Corrections, please advise

cherabelle

Hi,

Just wondered if anyone could give me some advice. Firstly I admit I was a bit wayward in my youth and took out a loan, missed payments and got myself into trouble which ended been passed from Welcome Finance to The Lewis Group collection agency.

For the last 18-22 months I have been strict with my payments and never missed a single payment, some months even offering ad-hoc payments to bring the balance down. Tonight I have checked my credit file to find out for the last 3 years Welcome Finance have been marking my payments as defaulted with a "6" ( for at least six missed payments) even as recently as this month even though I have paid my collection company on time and in full.

I called Welcome Finance as its marked against them and they just "fobbed" me off saying it was the Lewis Groups' problem and not theirs, the Lewis Group are saying otherwise. I have bank statements that show I have made all my payments on time and in full. I really dont know what to now as there is a massive red on my file now for this whole company for 36 payments.....

Any advice would be greatly appreciated as im really worried what to do.

Thanks

MusicalLawyer

They aren't allowed to do that - I don't know which guidelines state this though. They're supposed to have those 6's for 6 months, then register a default on your file - something like that.

Someone with more knowledge will be along soon enough for you though

DVardysShadow

So comparing your original payment schedule and where you are now, how many months payments are you behind at the moment?

cherabelle

Well im not really sure as the loan was orginally to be repaid at £260 per month and now I am paying at £50 per month through a debt management plan, although technically it would be unfair to say that I am six months behind for the whole time. When I went to the collections agency they said that the file would be marked as defaulted from when I started paying them and then It would show as up to date after that as technically I have a new repayment plan.

Thanks

backinbusiness

Wrong - you are in default of your original agreement. A default will show on your credit file for the next 6 years, adversly affecting your ability to get credit.

cherabelle

But is it right saying that I am at six missed even now if I am paying it off every month, also If I chose to settle the loan with them in the next few months what will happen then? Ie If I reach a settlement agreement with them for a lower rate and the loan closes what will happen on my file then??

You hear of all these people who have got themselves into much more trouble than me, pay the amounts off at lower rates like I am in attempt to sort it out and then end up with much better credit files after paying it off... it doesnt seem to be the case for me. Why isnt the fact I am making payments on time every month counting for anything now?

thanks

fermi

cherabelle wrote: »

Welcome Finance have been marking my payments as defaulted with a "6" ( for at least six missed payments) even as recently as this month even though I have paid my collection company on time and in full.

That doesn't make sense, as once defaulted you should only get a "D" or an "8" recorded monthly.

Don't confuse late payment markers (1-6) with a formal default. They are not the same thing.

If you are only paying at that level to a collection agency, then the account should have been marked as formally in default once the total arrears exceeded 3 months worth of full payments, or when the debt was passed to the DCA, or when you'd been paying much less than the contractual amount for 6 months. Basically, whichever of those happened first.

Then you should have a "D" or and "8" for the status, regardless of what you are paying.

Unless the original credit agreement is formally rescheduled, then any payments to a DCA will never show you as up to date. The informal agreement with the DCA is irrelevant as far as your credit files are concerned. You are behind or defaulted on the original debt, and that is all that counts.

So basically, they should have defaulted you here:

The ICO also specifically states that:

"A record showing a series of payments as six months in arrears when this does not reflect the real payment history should not be used as an equivalent of a default."

Recording such a false record will screw your credit files for 6 years from the date you finally settle the debt, whereas recording a default would only do so for 6 years from that original default date.

So one has to suspect that recording a false record of 6 payments in arrears rather than the default they should is a way to punish and harm your files for longer, hence keeping pressure on you to settle.

fermi

May be worth complaining.

Slightly similar case where that produced a positive result here:

https://forums.moneysavingexpert.com/discussion/comment/51680217#Comment_51680217

In the short term having an actual default may be worse (possibly), but in the long term your credit record would be clear sooner.

cherabelle

Thanks so much for your help everyone.

I have spoken to Welcome and they have advised that I write a letter with a copy of the error and my file and see if I can complain about it.

I know it might sound starnge to some of you but I would prefer it to show as a default in 2008/2009 as that would mean I am 3/4 years into the default and it will come off sooner.

xx