Why is the CRA scoring system so rubbish?

You-kip

rizla_king wrote: »

You can argue that defaults should stay on file until you have paid them off.

The whole system regarding defaults is a strange one, either way defaults are removed settled or not after. 6 years but IMO defaults SHOULD only be removed once settled.

jeystone

You-kip wrote: »

The whole system regarding defaults is a strange one, either way defaults are removed settled or not after. 6 years but IMO defaults SHOULD only be removed once settled.

Yeah I get the whole thing about, they want to see consistency, and not whether you eventually paid it off...however there should be some way out of the 6 year death grip...

i.e. default removed after paying the debts+interest, or even automatic removal if you pay 200% of original...just something

rizla_king

The point is that it stays for 6 years regardless as a warning to other creditors that you are a risk. So you can't just buy it off. Would be pointless if you could. 6 years is not that long.

lloydy22

rizla_king wrote: »

The point is that it stays for 6 years regardless as a warning to other creditors that you are a risk. So you can't just buy it off. Would be pointless if you could. 6 years is not that long.

I disagree, 6 years is a long time. I messed up when I was eighteen. Had lots of credit and was naive and didnt realise the damage I was doing. Paid everything off now. Learnt my lesson. Im 25 now and am debt free and for the last couple of years have been managing my credit perfectly. Want to go for a mortgage next year but know I will be hampered by these defaults. However, I am not a risk like I was back then. 6 years is a long time.

Tixy

jeystone wrote: »

How can there be no difference between a settled default and an unsettled one?

There is a difference between settled and outstanding defaults.

Whilst some lenders will give an automatic decline if you have defaulted in the last 6 years, or for some the last 4 years there are equally other lenders who do distinguish between a paid and unpaid default when making a lending decision.
Certainly some of the subprime card providers will lend to people with satisfied defaults but not with outstanding defaults, and simarly some mortgage lenders will consider satisfied defaults and not outstanding ones.

jeystone wrote: »

, or even automatic removal if you pay 200% of original...just something

How would that help potential lenders make sensible risk decisions?
Thankfully a good credit file isn't something that can be obtained by throwing money at a past problem.