Defaults on two accounts on my file - what can I do?

bendybus

I had major problems in late 2010 and early 2011. One of the outcomes of this was losing my grip on my finances and ultimately defaulting on two accounts - a credit card and a loan.

I am now in a better place, on a firmer financial footing and have paid off most of my debts. The outstanding debt is on the two default accounts.

I have arrangement on the c card to pay back, arranged through a collections agency.

I have no arrangement on the loan which has a balance of £1,500. The lenders have only just contacted me about it despite the amount of time it has been in arrears and I had forgotten it existed.

is it possible to improve my credit file with two defaults? Any advice?

pjread

Is the loan reporting as missed payments on your credit file, and the cc as AP ? if so, it's accurate and really paying it off is as much as you can do... it'll disappear eventually.

I'd leave the CC open if that's possible, and try to get it reporting some nice green zero's...

sfax

Wait 6 years unfortunately. It's a genuine default so it will stay on your file for 6 years

bendybus

The cc is showing as defaulted, but it also shows the payments being made... What is AP?

rizla_king

bendybus wrote: »

is it possible to improve my credit file with two defaults? Any advice?

The only real improvement will be when you finally settle the accounts and they are marked as settled. Or when they drop off after 6 years.

pjread

rizla_king wrote: »

The only real improvement will be when you finally settle the accounts and they are marked as settled. Or when they drop off after 6 years.

This is why I say leave the credit card open if possible. if you settle/close it it'll stay showing that for 6 years from settlement. if you keep it open, it'll drop the defaults 6 years from default date (which sounds to be over a year earlier, even if you settle today)

rizla_king

If the card is shown as defaulted then the account will be off the credit report 6 years from the default. Settling it won't stop that.

Tixy

pjread wrote: »

This is why I say leave the credit card open if possible. if you settle/close it it'll stay showing that for 6 years from settlement. if you keep it open, it'll drop the defaults 6 years from default date (which sounds to be over a year earlier, even if you settle today)

If it showing as a default then the whole account (including the default) will drop off their credit file 6 years from the default date shown on their credit file. Thats regardless of whether the account is open / closed / paid / unpaid at that point.

bendybus

So if I speak to the loan company to agree a repayment with them would the loan company then change the status of the default to an agreed repayment plan on the credit report? (if that's what AP means....)

Can i get the cc lender to do similar? Not sure how this works once debt is in hands of collection agency rather that the original cc lender

rizla_king

Sorry, but once an account has been defaulted the status stays that way.

Tixy

Once you have defaulted on the account then the default will stay on your file for 6 years.

The only real way to make a small improvement is if the debts are fully paid before 6 years period is up then they will at least show as settled defaults (which most lenders view as marginally better than outstanding default).

Other than that you will need to wait until the debts drop off (6years from the default date shown).