Default on credit file

chicha

Hi all, just after a bit of advice..

I had an overdraft with Santander, which, I rather stupidly left dormant for a while (about £1700). I then received a letter from a debt recovery agency (without any contact from Santander) and so have set up a repayment plan which I am keeping to without any problems. However, my Santander account on my credit file is obviously showing up as in default.
I can't afford to pay the amount in a lump sum - monthly amounts are the best I can do. My credit rating has obviously taken a hit and my mortgage fixed term ends in March. Am I going to encounter problems getting a new deal? Any suggestions about how to improve my situation?
Thanks in advance!

Tixy

Santander should have written to you to recall the overdraft before passing it to a debt collection agency.
However as you cannot afford to pay in full then this won't help aruge against the default.

Having a recent unpaid default on your file could well affect you switching to other mortgage lenders (or the rate they would be prepared to offer you). Fixing again with your existing lender should be easier if you don't want to stay on their SVR.

chicha

Thanks, Tixy.

My mortgage term is up in early March - say I manage to settle the debt before then - would this have much of a bearing - especially given that the debt, and my mortgage, happen to be with Santander?