6 years?

The_Boss

matttye wrote: »

Where's the sense in that?

Defaults are used to indicate risk, not as a punishment, and that's how it should be. Clearly someone with three new defaults is going to be a higher risk than someone with three defaults about to drop off, who hasn't been in financial trouble for 5+ years.

That's why some lenders will weight the defaults depending on how long ago they occured.

There needs to be a deterrent for defaulting too. If someone could get access to new credit a year or two later then what's saying they don't just default again and make a nice profit on their debt?

You-kip

shortcrust wrote: »

Maybe six years is what's needed to understand that defaulting on debts is serious and that access to credit is not a human right.

Completely agree.
If you're applying for credit with a Default on your file before the 6 years is up then you should have your application automatically declined after the lender spots a default.

matttye

shortcrust wrote: »

Maybe six years is what's needed to understand that defaulting on debts is serious and that access to credit is not a human right.

You-kip wrote: »

Completely agree.
If you're applying for credit with a Default on your file before the 6 years is up then you should have your application automatically declined after the lender spots a default.

Lets treat debtors like naughty schoolchildren and put them on the naughty step for 6 years is basically what you're saying.

If conduct is good since defaults occurred, and they are of some age, many lenders will consider the person a lower risk. There's no reason why someone should have to wait 6 years if they've learnt their lesson and can demonstrate this in the meantime.

The_Boss wrote: »

That's why some lenders will weight the defaults depending on how long ago they occured.

There needs to be a deterrent for defaulting too. If someone could get access to new credit a year or two later then what's saying they don't just default again and make a nice profit on their debt?

There already is a deterrent - the difficulty of obtaining decent credit.

I think the problem is that many people don't understand the consequences of getting into debt, rather than that they understand the consequences and still do it.

You-kip

matttye wrote: »

Lets treat debtors like naughty schoolchildren and put them on the naughty step for 6 years is basically what you're saying.

If conduct is good since defaults occurred, and they are of some age, many lenders will consider the person a lower risk. There's no reason why someone should have to wait 6 years if they've learnt their lesson and can demonstrate this in the meantime.



There already is a deterrent - the difficulty of obtaining decent credit.

I think the problem is that many people don't understand the consequences of getting into debt, rather than that they understand the consequences and still do it.

We touched a nerve Mattye?

ValHaller

You-kip wrote: »

This is where things should change.

Getting a Default and that losing its effect after a certain period shouldn't happen.IMO a default should screw you over for a full 6 years which means no credit for 6 years.

As matttye says, it is not about punishment, it is about assessing risk.

How would you feel to be punished for falling on hard times?

matttye

You-kip wrote: »

We touched a nerve Mattye?

Nope, just having a discussion. You're entitled to your opinion.

The_Boss

matttye wrote: »

There already is a deterrent - the difficulty of obtaining decent credit.

Hence why 6 years is a reasonable time for an unsatisfied default. Still not sure of my opinion on a fully repaid satisfied default. This would be an example of proving a lesson has been learned so perhaps a lesser penalty. But then why is it fair that this would be removed after (say) 4-5 years but late payments on a non defaulted account stay on for up to 11 years?

I think the problem is that many people don't understand the consequences of getting into debt, rather than that they understand the consequences and still do it.

Judging by the posts I see on the DFW board, it's clear that the majority of people expect to weasel out of most of their defaulted debt and don't want to pay it all back. Lenders provide information in their terms and conditions but not with too much prominence. Perhaps there should be a form explaining about entries to credit files that successful applicants are required to sign confirming they understand.

matttye

The_Boss wrote: »

Hence why 6 years is a reasonable time for an unsatisfied default. Still not sure of my opinion on a fully repaid satisfied default. This would be an example of proving a lesson has been learned so perhaps a lesser penalty. But then why is it fair that this would be removed after (say) 4-5 years but late payments on a non defaulted account stay on for up to 11 years?



Judging by the posts I see on the DFW board, it's clear that the majority of people expect to weasel out of most of their defaulted debt and don't want to pay it all back. Lenders provide information in their terms and conditions but not with too much prominence. Perhaps there should be a form explaining about entries to credit files that successful applicants are required to sign confirming they understand.

I think the current system is fine (it's other people in this thread suggesting that defaults should be an outright 'no' when applying for credit), but that late payments should disappear after six years whether the account is settled or not. Like you say it's not fair that late payments stay on for longer than defaults.

Yes this does appear to be the case. But it's highly likely that a lot of people just try to ignore their debt rather than post about it on here.

You-kip

ValHaller wrote: »

As matttye says, it is not about punishment, it is about assessing risk.

How would you feel to be punished for falling on hard times?

How would you feel if a family had nothing and the man of the house go and Rob a cashier to feed his family but be told later in life he can't have this Job or that Job because of his previous conviction.

matttye

You-kip wrote: »

How would you feel if a family had nothing and the man of the house go and Rob a cashier to feed his family but be told later in life he can't have this Job or that Job because of his previous conviction.

It's sad, but you can see why such rules exist. There's usually always a better alternative than crime. Free food banks etc.

Your question is somewhat irrelevant to the thread though. Defaults can occur if someone is paying back their debt, but less than what was agreed. They're not just for people who make no effort to pay or try to avoid the debt entirely.