Default on current account

amw10

I have just applied for some credit and been refused.
I couldn't understand why so I signed up for a free credit report (following reviews from this site)

It turns out that I have been issued with a default from an old current account. I think this account was last used in 2009 and it says there is £1013 left owing (I thought that this account had been cleared when I switched banks) I think it may be an old student account.

My question is - after a default has been issued I understand that it goes away in 6 years. I don't really need any credit etc for that time (i was only trying to get a new credit card to get a better introductory offer!)

Once a current account is defaulted - is that debt wiped off? Will they pursue it further? If I don't bother chasing it up will this just be one default issued for last month or will it keep cropping up on my credit report?

jokie

They can presue the debt until it becomes statue barred then you can tell them where to go.

the default will stay on for 6 years from default date and because its defaulted does not mean the debt is wiped off.

Tixy

6 years after the default date shown on your credit file the entry and the default will drop off your file.

The debt isn't wiped off. You could still be chased for this debt. And your creditor or a debt collector could still take court action for up to 6 years from the date the overdraft was recalled/date the account was last used (5yrs in Scotland).

What is the date of the default showing on your credit file?
You may find that a debt collector may start to chase for this debt (getting a copy of your credit file means they can see your current address or confirms your existing address).

amw10

I was contacted by a debt collector around 6 month ago regarding this matter. I explained to them that I thought the account had been paid off and asked them to send me some proof that I owed the money. They never bothered coming back to me - now nay west have issued a default - the default date is may 2013. Not too long ago - I dot know whether to just ignore it or whether to ring mate eat and get to the bottom if it?
I'd rather not pay the money if I can though

Tixy

The default date would seem to be unfair. If the debt was incurred and the account last used in 2009 then the default date would more reasonably be in 2009 or 2010.
Whilst in theory you could write to dispute the default date that would certainly put you back on the radar in terms of being chased for the debt.

If you receive debt collection letters then start by sending them the prove it letter and if they provide proof of the debt you could at that point also complain about the date of the default and it not being in accordance wth the ICO guidelines on filing a default.

If you don't get chased for it then it would be your call as to whether its worth paying it and having the account/default show as satisfied and also complaining about the default to hopefully have it backdated or whether you want to try to ignore the debt in the hope you are not chased for the debt or taken to court for 6years from the date the account was closed/recalled.

amw10

The only worry I have with ignoring the default is whether it will have an effect in 5 years when I come to get a new mortgage.
I never miss payments except this one.
By that time do you think it will matter.
Will this last for 6 years after the first issued default?

TheMortgageAdviser

With regards to getting a mortgage it will all depend at the time on 1) how much deposit you are able to put down - the bigger the better and 2) how tight (or loose!) the mortgage lender's credit score card is at the time of your application.
When lenders are wanting to lend money they loosen their score so may only search back say for the last three years. By comparison, if lenders want to tighten their credit scoring they will go back even longer, i.e. six years.

amw10

TheMortgageAdviser wrote: »

With regards to getting a mortgage it will all depend at the time on 1) how much deposit you are able to put down - the bigger the better and 2) how tight (or loose!) the mortgage lender's credit score card is at the time of your application.
When lenders are wanting to lend money they loosen their score so may only search back say for the last three years. By comparison, if lenders want to tighten their credit scoring they will go back even longer, i.e. six years.

Sorry I don't think I was clear.
I have just gotton a fixed 5 year mortgage in April.
I am thinking about when I come to shop for a new mortgage when this fixed 5 year period is coming to an end.
I'd have thought I'd have been ok if I keep all my other accounts in check - I have 9 accounts including 2 credit cards and 2 other current accounts and my current mortgage which are completely clear.
I just wanted someone else's view as to whether they think I'd have an issue in 5 years time or not?

TheMortgageAdviser

There's every chance you will be fine then in that case. It will still depend on your score and the amount of equity in your house when you come to the end of your deal in 4 1/2 years but the other thing to bear in mind is that if you are looking to remortgage at the end of your deal for a better rate rather than going onto the Standard Variable Rate, often lenders will offer you another deal with them and there will be no credit score involved.
So long in the future I don't think it's going to cause you too many problems and certainly if as you say you keep all of your other financial affairs in good order. The more time that passes the less of an issue it becomes.