Default and Arrears on Credit File

Hatecreditors.com

Hi. This is my first post so apologies if it’s in the wrong section etc as I’m new to all of this!

I’m slightly confused about my credit file with Equifax.

I started a Debt Management Plan back in 2009 when two of my creditors (Barclays & Tesco Finance) issued default notices on my current account and loan respectively. All creditors have accepted payments etc and the Barclays current account (overdraft) will be satisfied next month.

Having checked my credit file out of curiosity, I have noticed that Barclays have marked their debt with a default with one red D on the report. However, Tesco have applied about 17 red 6’s but with no default. This seriously affects the situation as the default would have dropped off 6 years after the default date (about 1 year after my debt free date) whereas those 6’s are going to stay on until 6 years after the satisfied date and will therefore remain on until 2020 (6 years after debt free date). This will seriously affect my chances of getting a mortgage in the future.

Is this correct? Are Tesco allowed to do this?

Tixy

Hi and welcome

The rules on defaults being issued are fairly complex and easy to intepret differently. Even regarding a DMP how it can be recorded varies depending on the level or payment and interpretation.

But did tesco definitely issue a default notice to you - if so and assuming you didn't then bring your account up to date (which I guess you didn't if on a DMP) then they should have issued a default notice on your credit file (which as you say would then start the 6years ticking).

If they did send a default notice I would write to them and state you have checked your credit file and notice that despite them issuing a default notice on x date your credit file does not reflect this and would they correct your file to show that you defaulted in xmonth 2009.

You might also want to mention part of the ICO guidelines on issuing defaults. This guideline does include a statement in section 25 regarding DMPs

"However, this should not result in the customer being placed in a worse position than someone who has made no effort to pay whatsoever, as in the example at paragraph 21. "

You might to consider checking your other credit files first experian & noddle to see if its recorded the same on those - in which case you can ask them to change all 3 or to see if there is a proper default date showing on any of those.

Hatecreditors.com

Tixy thanks for your prompt and informative response.

I will write to Tesco and see what response I get.

I don't mind them applying a default (I'm not trying to doge my responsibilities) but it appears that marking a file as 6 for 60 months (length of DMP) is far more detrimental than a default.

The default would have lasted for 6 years whereas the 6's will potentially last 11 years (length of DMP and 6 years after settlement).

fermi

Please read here ---> https://forums.moneysavingexpert.com/discussion/3172602

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."

So complain.

Slightly similar case where that produced a positive result here:

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

Hatecreditors.com

Hi guys. I rang Tesco today. They advised 'we were waiting to see if your position improved and could pay arrears before defaulting you'. Despite me advising that my payments are going to double, they are going to default the account next month once the CCCS review comes in. So that's now 6 years from next month. Great!

fermi

fermi wrote: »

Please read here ---> https://forums.moneysavingexpert.com/discussion/3172602

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."

The point of that ^^^^ is that they should have applied a default after 6 months if they were ever going to apply one.

So if they apply one next month and the default is dated as next month, then that would also be unfair. As up until then they would STILL have used a repeat reporting of 6 months in arrears when this did not reflect the real payment history.

If they are going to issue a default, then it should be backdate to no later than 6 months after you started the DMP.

That is in line with the part that Tixy quoted, where:

"However, this should not result in the customer being placed in a worse position than someone who has made no effort to pay whatsoever, as in the example at paragraph 21. "

Applying a default dated as next month would certainly put you in a worse position compared to someone who had never tried to pay.

Hatecreditors.com

Thanks for your reply Fermi.

I think I will wait to see if and when they issue the default and then apply for another statutory £2 credit report to see what date they have applied.

No doubt it will involve a lot of correspondence and ISO quotations to get this sorted. I am extremely pessimistic and always assume the worst!

erimus1

I'm sorry but I completely disagree - as you are making payments on this, the account should be marked as AP for arranged payments. Defaults notices should only be issued when communications between the parties have broken down completely. AP, although not great to show on your file, would certainly be better than a Default.