To pay or not to pay

atfcrick

Hi all, new member looking for some advice on clearing up my credit file.

I am looking to improve my rating, was down around 300 last year but have managed to get it up to 450 & have a couple of "clean" catalogue accounts. I have the following showing on my file & would like to know if it will make any difference if I pay them off or do I just wait for them to fall off after 6 years? Also, if I do nothing about them, is there any way that they can "re-issue" some sort of default so that they remain for longer? Also, any difference between open & closed accounts.

Closed accounts

Credit Card - Barclaycard - Default - £1560. Due to disappear Feb 2015.

Vodafone - Default - £97 - Due to disappear Feb 2016.

Lending Stream - "The account has been satisfied. The payment status has been reported as in default" - £224 - Due to disappear Sep 2016

Santander - Overdraft - "The account has been satisfied. The payment status has been reported as in default" - £233 - due to disappear May 2016.

Open accounts

Motormile Finance - Default - £200 - due to disappear Sep 2015.

Motormile Finance - Default - £292 - due to disappear Dec 2018.

Oakham - Default - £584 - due to disappear March 2019.


I am saving for a deposit at the moment & would look to try for a mortgage in late 2016, so on the face of it, if I keep my nose clean until then it is only the last 2 items that I would need to worry about. If I contact them to pay them off, would it make any difference?


Thanks

Rick

MrSilk

atfcrick wrote: »

Hi all, new member looking for some advice on clearing up my credit file.

I am looking to improve my rating, was down around 300 last year but have managed to get it up to 450 & have a couple of "clean" catalogue accounts. I have the following showing on my file & would like to know if it will make any difference if I pay them off or do I just wait for them to fall off after 6 years? Also, if I do nothing about them, is there any way that they can "re-issue" some sort of default so that they remain for longer? Also, any difference between open & closed accounts.

Closed accounts

Credit Card - Barclaycard - Default - £1560. Due to disappear Feb 2015.

Vodafone - Default - £97 - Due to disappear Feb 2016.

Lending Stream - "The account has been satisfied. The payment status has been reported as in default" - £224 - Due to disappear Sep 2016

Santander - Overdraft - "The account has been satisfied. The payment status has been reported as in default" - £233 - due to disappear May 2016.

Open accounts

Motormile Finance - Default - £200 - due to disappear Sep 2015.

Motormile Finance - Default - £292 - due to disappear Dec 2018.

Oakham - Default - £584 - due to disappear March 2019.


I am saving for a deposit at the moment & would look to try for a mortgage in late 2016, so on the face of it, if I keep my nose clean until then it is only the last 2 items that I would need to worry about. If I contact them to pay them off, would it make any difference?


Thanks

Rick

On the basis that this isn't a wind up, and is a genuine post, I don't think you'd get a mainstream mortgage in 2016, you could try again in late 2020, but with defaults a mainstream mortgage would be difficult. Defaults cannot be 're-issued'.

The barclaycard one, if you don't pay it off, they could go for CCJ which would make any mortgage impossible for at least the next 6 years. If you spent it, pay it back.

A default is a default, but a settled default is slightly better than an unsettled one.

atfcrick

Question is whether paying off the defaulted accounts would make any difference to my credit score / report? Most of the accounts do not contact me anymore, would I risk reopening an old wound by contacting and offering some repayment? The Barclaycard account is shown as closed, can they still go for a ccj?

MrSilk

Was the BC paid off? or just closed? if closed, then it has more than likely been passed to Debt Collectors, which can and probably will go for a CCJ, if not now, more towards the end of the 6 years.

It's not the fact if paying them off would make a difference to your score (no it wouldn't, not for 4/5 years).. But it's the fact of doing what's morally correct

Tixy

Satisfied defaults look marginally better to potential lenders than unsatisfied default.

The big benefit of settling though is it means there is no risk of a creditor taking you to court and obtaining a CCJ against you (which would then be on file for a further 6years).

Have you checked your credit report with all 3 agencies? if you are planning for a mortgage within a few years then it would be advisable to do so (e.g. if the Bcard debt was not repaid then it may well show as an outstanding default on one of your other files).

In terms of this

would I risk reopening an old wound by contacting and offering some repayment?

paying off your defaults won't mean they stay on file any longer, they will still drop off 6years after the default date.