Will my defaults be cleared if I pay them now, or if I wait a year?

barryworker

Hi all,

Like a lot of people, I made some poor credit decision while younger that have haunted me for a long time.

I checked my noodle report recently and noticed I only had a 1/5 score (rubbish) due to 3 defaults I have on my file.

The largest is only £580 with the others being around £50 each (I thought I had paid off all by late accounts but missed these three sadly).

They defaulted in 2009, so by my count I have around a year or two until it has been 6 years.

It is my understanding that they then are removed from my credit and I can start getting my life back on track?

I am in a position where I can actually clear these debts now, but am not sure what to do. Should I try and get in touch with the lenders and pay? I'm concerned they will add a new default to my record and I'll be stuck for another 6 years.

If I do pay them off, will it improve my credit at all before the 6 years are up, or will I still be in the same boat?

It sounds stupid but if I pay > £600 clearing these debts that have affected my credit for years and I'm still in the same place for another two years, is it worth even paying out?


In conclusion, what should I be doing to stop my credit getting any worse? I would really like to build credit as soon as possible?

Many thanks

The_Boss

Yes, pay them off so they are satisfied. No new default will be added and they will drop off your credit files in 2 years or so.

The default sums of £50 seem a bit low though. Have you checked with the lenders how much you actually owe them?

matttye

Defaults disappear six years after the date they're issued. If you paid now, I think the 'satisfied' indicator would be on your report for six years from the date that you pay... but someone else will be in to correct me if I'm wrong about that I'm sure A 'satisfied' indicator is a sign that an account was in default, as otherwise it would show as 'settled.'

There's probably no benefit to you to pay them off now unless you feel a moral obligation to do so. You could avoid court action, but if it's been nearly six years since you last paid/acknowledged the debt, the debts are nearly statute barred, which means they're unenforceable. If you did get taken to court, you could just pay in full at that point to avoid a CCJ in any event.

In short, I would just wait unless you feel a moral obligation to pay them.

JustinCredibleGillespie

I would just pay them off especially if they are so low. Then they will be marked as ''settled'' by the lenders and you can start all over again. You could apply for a sub-prime credit card (Vanquis or Luma )and start building up a credit history again. But its up to you. You can either do that or wait til 2015 til the defaults fall off.

If you pay them off and use a CC to rebuild your credit file then having 2 years of green ticks is alot better than it defaulting every month.

JCG

xx

The_Boss

matttye wrote: »

Defaults disappear six years after the date they're issued. If you paid now, I think the 'satisfied' indicator would be on your report for six years from the date that you pay... but someone else will be in to correct me if I'm wrong about that I'm sure A 'satisfied' indicator is a sign that an account was in default, as otherwise it would show as 'settled.'

Here I am. They drop off 6 years from the date of the default being recorded, not of the date of satisfaction.

Tixy

matttye wrote: »

Defaults disappear six years after the date they're issued. If you paid now, I think the 'satisfied' indicator would be on your report for six years from the date that you pay... but someone else will be in to correct me if I'm wrong about that I'm sure A 'satisfied' indicator is a sign that an account was in default, as otherwise it would show as 'settled.'

If you pay now the defaults will still only appear for another 2years (or so). They will always drop off at the same point no matter when or if you pay.

matttye

The_Boss wrote: »

Here I am. They drop off 6 years from the date of the default being recorded, not of the date of satisfaction.

Tixy wrote: »

If you pay now the defaults will still only appear for another 2years (or so). They will always drop off at the same point no matter when or if you pay.

Do you mean the entire account will drop off six years from the default being recorded or just the default indicator? I wasn't suggesting the default would still be visible, just the 'satisfied' indicator, but as I said, I'm not sure about that

This applies to both quotes. Thanks!

barryworker

The_Boss wrote: »

Yes, pay them off so they are satisfied. No new default will be added and they will drop off your credit files in 2 years or so.

The default sums of £50 seem a bit low though. Have you checked with the lenders how much you actually owe them?

My worry is that if I pay them I get 6 years of 'satisfied' (implying a default) whereas if I don't I get default for 2 years and then its completely gone?

Yeah, the £50 ones were from phone contracts my partner took out and thought had finished paying off but hadn't. Very annoying, but as I said I made some mistakes and buried my head in the sand for far too long. I sorted the much larger debts but lost track of a few. I'm an idiot.

The_Boss

barryworker wrote: »

My worry is that if I pay them I get 6 years of 'satisfied' (implying a default) whereas if I don't I get default for 2 years and then its completely gone?

Yeah, the £50 ones were from phone contracts my partner took out and thought had finished paying off but hadn't. Very annoying, but as I said I made some mistakes and buried my head in the sand for far too long. I sorted the much larger debts but lost track of a few. I'm an idiot.

The 6 year period of time will not restart - it's from the original date of default so no need to worry about that.

The problem is that the £50 may be a lot higher now with assorted fees added to it. I'd check with them.

Tixy

matttye wrote: »

Do you mean the entire account will drop off six years from the default being recorded or just the default indicator? I wasn't suggesting the default would still be visible, just the 'satisfied' indicator, but as I said, I'm not sure about that

This applies to both quotes. Thanks!

Everything disappears from the file 6 years from the original default date no matter what the borrower does.
The default, the satisfied, any record that the account ever existed at all.

matttye

Tixy wrote: »

Everything disappears from the file 6 years from the original default date no matter what the borrower does.
The default, the satisfied, any record that the account ever existed at all.

Ahh good to know Thanks!