full and final settlement improving credit file???

pma13

Hi All

I didn't realise that full and final offers are recorded as partially satisfied. Suppose makes sense, I was in a position to pay off some of my debts and then with my debt management plan i would probably be paying more than the minimum payment and would be cleared quite quickly. The aim is I want to buy my house, through social housing. So I want to improve my credit rating, what are peoples advice- just pay the full amount owed as at least will show as satisfied fully? or go for the ff settlement ? any advice feedback greatly received x

sourcrates

pma13 wrote: »

Hi All

I didn't realise that full and final offers are recorded as partially satisfied. Suppose makes sense, I was in a position to pay off some of my debts and then with my debt management plan i would probably be paying more than the minimum payment and would be cleared quite quickly. The aim is I want to buy my house, through social housing. So I want to improve my credit rating, what are peoples advice- just pay the full amount owed as at least will show as satisfied fully? or go for the ff settlement ? any advice feedback greatly received x

Hi,
If you already have defaults then I would make offers, if on the otherhand you have a good credit record, and want to keep it that way, them the full amount route is the one to take, depends on your circumstances, as defaults stay registered for 6 whole years !!!

[Deleted User]

I doubt if paid partially or fully will make much difference on your credit file, since the debt will still be registered as a default. There are some pre-paid debit cards that help build a credit history, which might be useful to you.

Tixy

Full settlement of the debt will look better, but obviously reduced F&Fs mean you can get the debt cleared quicker and ideally save up a bigger mortgage deposit.

It really depends on your timescales though (as well as how much of a reduction you can get).

Even if you do make F&F offers are you realistically likely to be buying a house before your debts drop off your credit file anyway?

If you have been in the DMP a while and have defaults that are already a few years old then they are not going to appear on your file for that much longer anyway regardless of whether they say partial or fully satisfied (assuming that your debts all have defaults on your credit file).

National_Debtline

Hello all, we put the question of 'partial' settlement to Experian, this is what they told us:

The debt would be recorded as a partial settlement. A P flag would be added to the file to indicate a partial settlement.

The outstanding balance will be changed to zero to reflect that no money is due; but the P flag will show that it was not paid in full. We don't currently believe such flags are usually used in credit scoring, but they could well be included in a lender’s underwriting policy rules. This could mean that the appearance of a flag on a report would trigger a manual review of the application, where the additional information could then be considered by one of the lender’s underwriting experts.

Hope this helps!

David @natdebtline

sourcrates

pma13 wrote: »

Hi All
I was in a position to pay off some of my debts and then with my debt management plan

I really should read posts before replying to them lol:D

pma13

its horrible facing the cold hard reality cant believe Iam in this position just want to buy my house, wish I d not buried my head in the sand....so those defaults will stay on the 6 years and I ve currently got plenty of them! even though iam on a plan and they still register as defaults and ive been paying regular through step change....I think my heart is telling me go for the full final

Tixy

6 years from the date of default as shown on your file, not 6years from now.

marliepanda

pma13 wrote: »

its horrible facing the cold hard reality cant believe Iam in this position just want to buy my house, wish I d not buried my head in the sand....so those defaults will stay on the 6 years and I ve currently got plenty of them! even though iam on a plan and they still register as defaults and ive been paying regular through step change....I think my heart is telling me go for the full final

The defaults stay on 6 years from when the were put on. They are the standard when going on a debt management plan, as you are defaulting in your agreed terms. Sadly your crefit file needs to be an accurate reflection, otherwise it is pointless