HELP - should I pay a defaulted account?

LASubzer0

Hi

I recently tried to re-mortgage my house, but got declined. After looking at my Credit Report (Equifax) I noticed that I had a loan from 2007 which defaulted in 2008 (due to being un-employed - I buried my head in the sand and forgot about the loan)

Couple Of Questions:
Will the default drop off my credit report after 6 years (2014)
Is it worth paying off the default now? If I do what affect will that have on my overall credit score?
If I did pay the loan off, would the loan company be able to delete the account information (so it does not show on the report)

Any advise would be much appreciated.

fermi

LASubzer0 wrote: »

Will the default drop off my credit report after 6 years (2014)

Yes.

LASubzer0 wrote: »

Is it worth paying off the default now? If I do what affect will that have on my overall credit score?

Would make you look somewhat better to a mortgage provider, but how much real impact it would have is hard to say.

LASubzer0 wrote: »

If I did pay the loan off, would the loan company be able to delete the account information (so it does not show on the report)

In theory, yes. In practice, 99.9% of loans companies will not consider it. It would not set a good precedent for them to commonly do this. If it's now in the name of a debt collector you would have a better chance, but it's still slim. Most companies will turn you down flat, and some will even trot out some nonsense that it would be "illegal" for them to do this. It is not.

walker123

Didn't want to read and run.

Providing you have made no payment toward the debt or acknowledged it in the form of a letter etc then yes it will drop off in 6 years - I think this is different for a CCJ though so if they obtain one of those it is different.

If you can pay it off I would - think it would show as settled then.

The loan company will not remove the default as it was applied correctly - assuming you did receive default notices etc.

Hope this helps and sure someone with some more professional advice will be along soon.

rtho782

I had a similar situation with an old mobile phone debt, then owned by Arrow Global.

Was only £100, so I could have settled it easily, but it seemed that a settled default would have been 99% as detrimental as an unsettled default to my credit rating.

I did write to them saying I did not adknowledge the debt as being mine without further proof but as a goodwill gesture I was willing to pay it in full on condition that it would be removed from my credit file completely.

They refused, I waited out the additional year or so until it vanished.

Tixy

walker123 wrote: »

Providing you have made no payment toward the debt or acknowledged it in the form of a letter etc then yes it will drop off in 6 years - I think this is different for a CCJ though so if they obtain one of those it is different.

It would drop off regardless of whether OP has paid anything in the last few years or if they pay it now.
Accounts that are defaulted always drop off the file 6year after the default date - whether paid, partially paid or unpaid