Defaults, debts and windfalls — advice please

nikongirl

I've recently been thinking about my credit history and its impact on my future. I got into a lot of debt several years ago and pretty much lost all hope of ever being able to get a mortgage but recent events have made me realise that eventually (we're probably talking at least 5 years away) I might have a windfall which could make that a reality. Only problem is, I need to sort my credit history out before anyone in their right mind would lend me money!

The current situation is this:

I have two CCJs on my file. One is satisfied, due to fall off the list in July and the other (£900 — I thought this was Halifax but they're also listed as an account, see below) is still outstanding, not due to fall off the record for another 4 years.

I also have two accounts showing as defaults. One is a Halifax overdraft currently with Arrow Global at £760, which is shown as defaulting in June 2008 and an Egg/Barclaycard of £7,500 (eek!) which defaulted in 2010.

I've not had any contact from either company or their debt collection agencies in over a year (I have moved since their last contact so maybe that's why!).

I've recently had a windfall of £2,500 which I would like to use to my credit report's best advantage. I've been reading a lot about defaults and the fact that they fall off credit reports after 6 years with some people debating whether it's worth paying them because even if you settle it you 'reactivate' the account and therefore it stays on your report longer than necessary. I'm now reading a lot of conflicting ideas and getting ever more confused.

What I'd like to do is offer a full and final settlement to the relevant companies but I want to know that this isn't going to damage my credit report even further.

Any advice much appreciated.

mardiemare2008

nikongirl wrote: »

even if you settle it you 'reactivate' the account and therefore it stays on your report longer than necessary.

Any advice much appreciated.

The default will remain on you credit file for 6 years from date of default whether paid or unpaid.

morally you should pay the money back (this will look better before the defaults drop off)... But once the 6 years have elapsed it wouldn't matter whether you'd paid them or not.

happy_bunny_2

If they don't have your up to date address, they might get a CCJ at any point up until 6 years since since you last paid or acknowledged the debt in writing.

If they did this, you wouldn't know until the CCJ appears on your credit file, as they would send papers to your last known address.

If they did this just before the default drops off, it screws you for another 6 years.