What is the difference between default and arrears?

manda84b

What is the difference between default and arrears?

The reason I ask is that I fell into arrears back in 2008 and made a repayment plan with Tesco via Moorcroft. During this time I still received statements from Tesco and settled the debt in 2012 with the debt collector (Moorcroft). My credit report shows I defaulted in 2012. Surely, this should be back in 2008?

Thank you for any help!

happy_bunny_2

Defaults should usually be filed within 6 months of not paying or paying significantly reduced amounts.

You may have been on an arrangement to pay.

Did they default you when you finished paying off the account?

What status does the account show up until the default?

It does indeed sound like you should have defaulted earlier. Have a read of these then complain in writing to whoever reported the default. Presumably Tesco?
https://forums.moneysavingexpert.com/discussion/3172602

manda84b

I missed numerous payments in 2008 and then made a reduced payment Nov 2008 when it was passed to Moorcroft. I then missed a few more payments and did not continue payments until Aug 2009. Surely during some point between 2008-2009 I would have been defaulted?

I do not know if I am reading my credit report correctly but I have had a look and it shows that I have been in arrears with payments for 4 years? The default date according to my report is 01/02/12 however I settled on 05/05/12. Why would I default when I am continuing payments? Also the account is still in the name of Tesco Bank rather than Moorcroft on my credit report so it would appear that Tesco has defaulted me.

happy_bunny_2

Do Moorcroft own the debt, or were they collecting for Tesco?

If a debt is sold, the 2 parties agree between them who updates your file.

If the debt was sold, then that is the latest the default date should be.

It's hard to know without a bit more info on your credit file.

What the the status codes for those 4 years? E.g all 1 and 2 or are they 4, 5 or a row of 6s

manda84b

Thank you happy bunny. Sorry I am unable to post a copy of my credit report but it shows that I had a continuous row 6's from 48 month ago, which would be the time I was contacted by Moorcroft stating they had taken over the account. I continued payments with them, not missing one. The default date is 01/02/12 which is 3 month prior to the account being totally paid off. I never missed a payment with Moorcroft so I do not understand why they would default me. The account on the Experian states it is with Tesco Bank not Moorcroft. I have wrote a letter to Tesco Bank asking when I defaulted and to have my record amended. Hope this makes sense.

happy_bunny_2

Yes, makes sense.

They shouldn't record a row of 6s instead of a default. Thats against the guidelines.

When the debt was sold, a default should have been placed. End of.

When did you write to Tesco?

manda84b

I have only just wrote the letter and am due to post it this afternoon.

My concern is that all my issues were in 2008 when I suffered financial difficulties, all my accounts which defaulted are due to "drop off" my credit file this year and it was just by chance that I checked and realised that was the only account that didn't have a default date in 2008. I am hoping to apply for a mortgage at the end of the year when my credit file is clear.

happy_bunny_2

The date seems wrong to me.

Tesco have 8 weeks to give you their final response. Then, if they refuse to change it, you can refer to FOS. You can refer if they ignore you also.

Let us know what they say.

HB

manda84b

Brilliant, thank you very much for your help. Will keep you updated.

manda84b

Just to provide an update with regards to this, I haven't heard anything from Tesco, nothing in writing at all but I didn't expect to. However, checked my credit report this morning and they have changed my default date back to 2008!!! Yay, so pleased.

lynntina3

wow.. great...