Defaulted Loan Showing on Credit Report

waller2012

I recently got rejected for credit from my bank and was advised to check my Experian credit report. I did this and found everything on there was a nice green colour saying "satisfactory" apart from one which was the first ever loan i took out which, to be fair, i cocked up on badly, however the loan however was paid off in full in 2009 and the default is registered as being from 2006 and will apparently "drop off" in November this year.

The main query is the 2nd loan i took out to pay off this loan also defaulted however this was also paid off and it is showing as "settled" and is showing as having no status but more importantly NOT in default...although the original one is showing as "satisfied" but also still being in default even though being settled long before the 2nd loan was!?

I have been told that due to the default dropping off my report in November this wont affect my credit score too much however on the main page it is in big bold letters that "You have an account regarded as defaulted or delinquent" as a negative factor on my report.

Apart from this account in default ive only missed a few payments here and there in the past 6 years and everything is "satisfactory" so im struggling to understand why, if this "default" account is not affecting it very much why is my credit score "very poor" and i cant seem to get credit, even for a £50 overdraft or mobile phone contract.

Can anyone shed any light for me please.

Thanks :money:

BugsyBrowne

No Decent lender will entertain you while that dirty default is sitting on your file and won't until that drops off.

Defaults as you know stays for 6 years from when registered on report.

Tixy

have been told that due to the default dropping off my report in November this wont affect my credit score too much

Who told you that? - its simply not the case that it won't affect your ability to get credit (no idea how it affects your experian score - but thats not relevant to you ability to get credit).
Any default - even one from 5.5 years ago will have a significant impact on your chances of being accepted for credit. Its certainly possible to get some credit accounts with old settled defaults on file (such as subprime credit cards etc) but it is likely to be a significant problem for a lot of mainstream lending.

If you defaulted on the second loan as well then you are fortunate that that does not show on your credit file.

ive only missed a few payments here and there in the past 6 years

This is also a negative to any potential lender.

waller2012

Tixy wrote: »

Who told you that? - its simply not the case that it won't affect your ability to get credit (no idea how it affects your experian score - but thats not relevant to you ability to get credit).

Believe it or not it was the bank manager from my local bank branch who was on the phone to a customer service representative from Experian at the time!

So basically even though the owed amount is zero, it is still correct for the entry on my credit report to show as "in default £1188 and satisfied" and i will just have to wait untill November when this drops off to be able to start getting any decent sort of non astronomical interest rate credit?

I was thinking of going into the branch of the bank that i got this original loan from to dispute it, but thought id just check with people here first before making a complete tool of myself.

erimus1

Hi there Waller2012. The credit reference situation in this country is a complete mess and completely unjust. Whilst properly allocated default notices are both usefull and necessary to ensure proper lending criteria, the ruthlessness and blatant disregard to policies and procedures that companies show creates an ineffective system.

As already stated, you seem to be very lucky that the second loan is not showing as a default on your credit file, however, bare in mind that it may be the case that, although you have actually defaulted on the loan agreement, the creditor may not have issued a default notice on your credit file. While, under ICO guidelines they are required to do this in a timeframe of between 3 and 6 months of the account defaulting.

Just be aware that a default could appear for the second loan at some point too. I would be interested to see a screenshot of your file if you are able to show, but please remove any personal information first.

Please also be aware that you can ask your bank to underwrite an application manually. If you add a notice of correction to a credit file then ny automated process is passed to an underwriter to look at first.

Tixy

waller2012 wrote: »

So basically even though the owed amount is zero, it is still correct for the entry on my credit report to show as "in default £1188 and satisfied"

Yep thats correct. It should always still show the amount of the original default but shows that you have since paid it off and nothing is owed. An unsatisfied default is obviously worse than a satisfied one.

waller2012

Tixy wrote: »

Yep thats correct. It should always still show the amount of the original default but shows that you have since paid it off and nothing is owed. An unsatisfied default is obviously worse than a satisfied one.

Ok cool so it will be useless going into the branch then. I will just have to wait untill November for this very bad blemish to drop off my file...hopefully then i can go back into the light green / green area and out of the red!

Thanks very much ) :beer: