Default on credit file

deshg

Hi everyone,

I am currently applying for a mortgage and wanted to get my credit file as clean as possible for the process.

Everything is in good standing apart from one default from many years ago for a Lloyds student account that i forgot about (stupid me!)

The last payment into the account was on 11/12/2003 which reduced the balance to £644.50. I subsequently forgot about this and didn't update my address and in 2010 received a debt collectors letter about it (saying i then owed £1733.78 due to interest).

I contested ownership of the debt based on the fact i had forgotten and it had tripled (actually mainly because, would you believe, one of the Lloyds employees i spoke to advised me to do this as the debt was so old she said that they wouldn't have accessible records and would write it off!)

After much discussion i finally received a letter in Oct 2010 saying:

I have completed my investigation into your concerns and i am sorry to advise you that i am unable to accept your complaint. I know this will be a disappointment to you and it is important for you to understand the reasons for my decision, which are set out in detail below.

The account was opened as a student account on 28 June 2010 [sic]. I regret I am unable to supply you with statements prior to 1 Feb 2002. However, as you can see from the enclosed statements, payments were made to the account of £10.00 on 5 Aug 2002 and £900 on 22 December 2003, this latter at a time when the account was at a debit balance of £1544.50. Your payment reduced the balance to a debt of £644.50.

The full debit balance of £1733.78 is due and payable, but in view of the time since you last looked at your account, I am prepared to give you the benefit of the doubt and accept that you had forgotten about it.

Consequently i am writing of the full amount of the debt and we will not look to you to make any further payment towards it.

On my credit file it says the start date was 28/06/1996, the default date was 04/08/2009 and the updated date was 16/08/2012.

I appreciate i have ultimately already done well on this front (given they wrote it off) but i wanted to check whether there is anyway to have the default removed or at least the 'defaulted' status removed (because according to their letter they have agreed to write off the full amount of the debt so surely it's not a default?)

Additionally/alternatively the default date is 08/2009 but no payment was made to the account since 12/2003. Doesn't this mean that the default date should be much earlier (and hence be closer or past the 6 years it should stay on my account)?

Would love to hear your thoughts!

Thanks everyone,

Dave

fermi

Lloyds have a habit of doing that with default dates.

i.e. wildy inaccurate date 6 or more years after you last had anything at all to do with the account.

A default is valid, as you did default, but the date MUST be accurate.

6 years later is completely and irrefutably inaccurate.

Complain and demand that they correct the default date, whic is backdated to 2003 or a tad later would in effect remove it from your file anyway.

Tixy

In terms of them writing off the debt - it may very well have been statute barred anyway at that point.

The statements they sent to you - what date did they go up to? did they go all the way up to 2009/2010 or did they cease at some point? Can you tell from them or any other correspondance what date the overdraft was recalled.

Arguably the latest the default date should be would be 6months after the date the overdraft was recalled.

deshg

Thanks so much for your speedy replies fermi and tixy. The statements they sent me are from 28/08/2002 (first one they sent) up to 29/07/2009 (which is when they obviously closed the account as it has 29Jul09: Closed Account with 0.00 balance).

So i guess this why the default date is 04/08/2009 as this is a week later. So i suppose based on tixy's response the default date could be deemed correct, it just seems rather arbitrary to me that they stopped at this time when no payments had been made for nearly 6 years! But i guess that's probably up to them?

Presumably this means i don't really have any justification to have the default date changed to earlier?

Thanks so much for your help,

Dave

fermi

It's not reasonable or accurate in any way to just leave the account for 6 years with no contact or no payment before deciding to default it.

As said, have seen a few cases like this before and some have been able to get the default corrected/removed.

Complain, saying you will take it to the FOS if they do not change it, and see where you get.

If you don't do that it will certainly stay as it is.

Tixy

Definitely agree it is worth trying to challenge it.

deshg

Thanks so much for your replies i will send them a letter and see if i can get it changed. Are there any rules/regs that i can quote that will help my case (in terms of them not waiting for 6 years before closing the account/marking it as a default). they had an incorrect address for me so it's possible they tried to contact me and i didn't get their letters. Or should i literally just send a letter stating the relevant dates and the fact the last payment was made in 2003 so the default date should be closer to that and see what they say?

Additionally (and this is probably just me misunderstanding) but should it definitely be marked as 'defaulted' and not 'settled' as whilst i didn't pay it they wrote off the debt (instead of me just not paying it) so surely that is 'settled' not 'defaulted'?

Thanks again everyone,

Dave

Gordon_Hose

Do you have an agreement in writing that they'll write the debt off?

If not then you'll get nowhere using this to get the default removed. Debts very rarely get 'written off', they always still exists but some companies just stop chasing them. That's why it is important that you have everything in black and white if it ever resurfaces.

Even if they did 'write it off' you still defaulted originally.

deshg

Gordon Hose > In the final letter they sent me (full letter in first post above) they specifically said they were writing it off: "Consequently i am writing off the full amount of the debt and we will not look to you to make any further payment towards it."

Thanks,

Dave

fermi

Failing to pay the OD is still a default, even if they later took a commercial decision to write off or not pursue it.

Realistically the best bet is to argue against the date.

If that is set to 2003 or shortly after it will wipe it from your report as a default that old would not be shown.

deshg

Thanks fermi, i will send them a letter requesting they change the date as you suggest.

Are there any rules/regs that i can quote that will help my case (in terms of them not waiting for 6 years before closing the account/marking it as a default). they had an incorrect address for me so it's possible they tried to contact me and i didn't get their letters. Or should i literally just send a letter stating the relevant dates and the fact the last payment was made in 2003 so the default date should be closer to that and see what they say?

Thanks so much,

Dave