Direct debit unpaid - impact on credit file

AliceBanned

I wonder whether anyone can advise. I opened a new current account six months ago. Recently a montly direct debit of £50 which goes out to a family member in repayment of a loan, was returned due to insufficient funds. This was the only one returned, and it was partly due to oversight, partly due to, well, insufficient funds at the moment, not a situation i can't slowly resolve.

I may have miscalculated slightly and I also had a couple of fines to pay last month. It is the first time it has happened in this account and the first time for several years anything like this has happened - probably over 7 years! The bank has said it will be noted on my credit file and have "far reaching consequences" according to the person I spoke to a couple of days later when I rectified it. I think this is a bit extreme. It isn't a bill payment, or even an essential bill. The relative in question is happy for me to pay less but I can usually make the payments and am paying as much as I can as his kind loan and gift enabled me to buy a flat. My debts have been building up recently (partly due to property purchase) and I'm looking into this in a separate thread but my outgoings are quite high and it's an ongoing process.

Just think it really mean of them to report back to credit files when it is not an essential bill at all. I had tried to extend my overdraft, and my other current account, Halifax waived some fees last month as after speaking to me they described my situation as "heavily overindebted". I wouldn't say it is out of control but clearly I need to focus on it a lot for the next few months. Apart from anything they are all charging me the earth the deeper the debt goes so they make it so much harder, then turn around and make comments about the consequences! :mad:

Thanks for any advice.

grumbler

AliceBanned wrote: »

... The bank has said it will be noted on my credit file and have "far reaching consequences" according to the person I spoke to a couple of days later when I rectified it.

Have a look at this thread: HSBC, Returned Direct Debit and Credit File

I don't think that one late payment record has "far reaching consequences" as it's the least important 'offense'.

That said, how does your relative take money by a DD? Is it some sort of saving account that can be funded by a DD?

Gromitt

Are you sure it's a DD and not a SO (Standing Order) ?

Banks don't look favourably into either being bounced, and some will close your account if you have too many that get bounced.

If you have financial problems then the best thing is to cancel the DD/SO and pay manually as and when you have funds.

AliceBanned

Maybe it's a standing order - actually I think it must be, sorry about the confusion. Yes it is one of those banks - had no idea they would do this. I just need to sort things out but I now have a £222 council tax bill due by 01 January. It never ends..

Good point - I could send a cheque each month. Finances in a bit of a mess at the moment so it's a difficult balancing act every month.:(

grumbler

AliceBanned wrote: »

Good point - I could send a cheque each month.

You could just do a manual bank transfer.
A cheque might be a new source of problems as you never know when it will be deposited and cleared.

AliceBanned

grumbler wrote: »

You could just do a manual bank transfer.
A cheque might be a new source of problems as you never know when it will be deposited and cleared.

Good point. Thanks.:)

AliceBanned

I just phoned First Direct and explained my circumstances - having just moved/bought first property etc and struggling a bit due to that.

They are going to try to stop it being reported on my credit file as a late payment - the lady I spoke to was very understanding. She didn't think it would impact hugely as a late payment in any case but understood that the things that had been said to me had caused me anxiety and as a goodwill gesture is going to try to stop it being reported.

Also it is first time it has happened and sure I went over my o/d but now that I know they do this I will be more careful and time it properly etc. It is so hard to keep on top of it all (administration wide not just financially) with new council tax, energy bills etc all coming in at once. I hope they won't report it to credit ref agencies on this occasion, looks like they won't.:)