Incorrect Default on a Settled Debt - How Does This Affect my Credit Rating?

darley.wood

Hi,

In about 2008 the Halifax incorrectly 'deleted' my student bank account and reopened my account as a current account that required a minimum payment, a monthly charge and no overdraft facility without telling me. I then of course started being charged for being in my overdraft and not making the correct payments.

I disputed this and went through a lengthy process to prove I was still in year two of my 3 year uni course, and they eventually reverted my account back to a working student account however did not refund the charges.

I disputed the charges knowing that they had been wrongly placed on my account. This then led to an incredibly lengthy dispute with their communication to be riddled with errors and not conforming to timescales set by them or the financial ombudsmen who also got involved. They called in my student overdraft of about £800 to be paid immediately in full.

As I was still a student I found this near impossible to do and the dispute went on. It was finally settled in July 2010 with the majority of the payment paid by myself and then some of the original charges being 'waived' by the Halifax. I received confirmation of this by the debt company and that this would be marked as 'settlement' on my credit file and my balance was zero.

July this year I received a letter from a debt company saying I owed the Halifax a further £250. It took a further few months to sort as their reference numbers did not match mine, a copy of my original debt card which expired in 2008 (which I magically still kept) was their reference number. My balance was agreed as zero and the case was dropped.

Myself and my partner now want to apply for a mortgage, so I decided to check my credit file. All is fine on it, apart from one glaring red mark which reads 'Halifax - default on payment of £1,450' in 2010 AND it reads I still owe them £200.

I have not defaulted any payments, the account was settled and my balance is zero. What should I request the Halifax to change it to in reflection to the situation and how will this affect my credit score?

A default will = no mortgage but im not sure on a 'settlement'. The amount was paid off by myself and the Halifax agreed to drop some of the charges, does this not count as a cleared settlement? Also, as it related to 2010 - would any update still be counted back to 2010?

Please help or advise as I cant even begin to start a mortgage application until this is sorted. And we really want to move onto our first house.

Thank you.

Tixy

Are you disputing that there was a valid default at all or the date of the default?

What date (approx) was the overdraft recalled?

It sounds like the date is probably unfair and certainly showing an outstanding balance is unfair, it also sounds like it would be difficult to get them to agree that there should never have been a default entry made.

darley.wood

I was disputing the idea that I defaulted the payment as it was under investigation the entire time until I made the final payment in full under the agreement that this would close the account and the balance was zero. That was in 2010 as it had taken almost 18 months to get to that stage with correspondence going to and from the Halifax and Ombudsmen the whole time.

My overdraft was recalled during 2008 whilst the investigation was being handled by the Ombudsmen - which they ruled Halifax were able to do at any time although they argued it was unfair to do so during the investigation as the account was meant to be 'suspended' whilst this was happening and no further charges placed on the account.

happy_bunny_2

Your best bet might to argue that the default should have been applied when the OD was recalled, if they were told they could do that at any time.

That way it will be gone in 2014.

If it's such a mess, might be hard to get removed totally.

darley.wood

Thanks, I'll see what they say to my initial complaint about the incorrect record (as there certainly isnt anything outstanding and the account was settled, not in default etc) before I try a bit harder. Having it cleared by 2014 would be a lot better than 2016+ for example but to get it removed at all would be ideal. This is not the only time they have messed my account around, 'screwed me over' - eg cancelling my card instead of someone elses and then not replacing it for 2 months, freezing my account and then not being able to tell me why and incorrectly addressing letter to an old address for two years whilst having repeated 'change of address' forms completed in writing, online, on the phone and in person in branch and still failing to act on it until the ombudsmen told them to.......