Defaults on Credit File

Scootymad

Hi guys,

Just after a bit of advice really!

I have 4 credit accounts on my credit report, which all went into default a while back. About a year back I set up payment plans with all of them, and the amounts are being repaid, but they still show as in default, even though the agreed amount is being paid... Is this right?

Im trying to rebuild my credit rating and it seems to be going nowhere!

Any advice?

fermi

Yes, that is right. Once defaulted accounts stay that way in the monthly status codes.

Reason being, the 1,2,3 etc or up to date status codes indicate how you have kept to the original credit agreement. Once defaulted because you have broken that agreement, it stays that way, as no subsequent payment plan "unbreaks" it.

So the status will stay as a D or 8 from then on.

The lender should however reflect the fact that payments are being made by updating the balance owed to show it reducing.

Tixy

That is correct, defaults stay on your file for 6 years from the default date on your file.

Whilst you are repaying the debt all that should change is the balance outstanding, which should be updated regularly.

Once the account is fully paid the default will still show, but will be marked as [STRIKE]outstanding[/STRIKE] settled.

EDIT corrected- sorry for the confusion

Scootymad

I see, so even once the balance is cleared, it wont show as settled, but will remain as a default on the account?

izools

Scootymad wrote: »

I see, so even once the balance is cleared, it wont show as settled, but will remain as a default on the account?

Yes, the fact that you defaulted on the agreement will remain recorded on your credit file for six years from the date you originally defaulted.

You will need to as well as pay the defaults off, but also rebuild positive history in the form of easy to get accounts, e.g:

Bank account like Co-Operative Cashminder or Barclays Cash Card account as these will appear as up to date accounts on your credit file.

A SIM-Only mobile phone contract from Three

If you have accounts like a bank account and mobile contract already then you're building positive history - keep paying these on time every time without fail - and once your defaults show as settled you should have no trouble getting a couple of sub prime credit cards.

Again, once you've had those for a couple of years you should find your creditworthiness much improved

fermi

Scootymad wrote: »

I see, so even once the balance is cleared, it wont show as settled, but will remain as a default on the account?

It would then be a settled default, if you see what I mean.

Scootymad

izools wrote: »

Yes, the fact that you defaulted on the agreement will remain recorded on your credit file for six years from the date you originally defaulted.

You will need to as well as pay the defaults off, but also rebuild positive history in the form of easy to get accounts, e.g:

Bank account like Co-Operative Cashminder or Barclays Cash Card account as these will appear as up to date accounts on your credit file.

A SIM-Only mobile phone contract from Three

If you have accounts like a bank account and mobile contract already then you're building positive history - keep paying these on time every time without fail - and once your defaults show as settled you should have no trouble getting a couple of sub prime credit cards.

Again, once you've had those for a couple of years you should find your creditworthiness much improved

I see! I do have a Capital One CC which I pay in full every month, along with a Mobile Phone contract with Orange, so they show as up to date on my credit file, as does my HSBC account.

So really its a case of getting the defaults paid off, and carry on as I am!

Thanks guys

izools

Ahh great, yeah keep at it - you're doing all the right things. Well done :beer:

simeyb

That is right, but even when the Default accounts are settled, which will, as others say, show as settled on your file, they will still show as Default for 6 years from when the accounts defaulted and until they disappear (which automatically happens after 6 years), you aren't going to be able to get any new credit as lenders will still see the defaults. That they are settled is better than outstanding, but defaults nonetheless.

Scootymad

Ah, so defaults will drop off 6 years from the date that they went on to the account, not 6 years from when they are settled?

What happens if they remain unsettled after the 6 years?

Scootymad

This also raises another question... this month a new default has appeared from a company called Arrow Global LTD. Judging by the amount they say I owe, they have taken over a debt from another company. Problem is, there was a default on that account for about 3 years... but they have taken it over and the default start date is showing as this month! What can I do about this, as I don't know the exact date the account went into default?