Defaults on credit report

jagger86

Hello - just after a bit of advice regarding defaults.

My partner is one of those people that thinks ignoring stuff will make it go away! We have been trying to get a credit report for him for 3 months but it was saying he didn't even exist, I ensured he was on electoral roll and updated bank address etc and finally been able to access it on experian.

It's not looking very good at all - he has 2 current accounts which have defaulted and two other companies which we are unsure of what they are showing as defaulted also. These are from around 2012.

He is going to contact them to settle them they aren't even for a lot of money. I know these will stay on for 6 years but my question is will he be able to get a mortgage within these 6 years?

We have a 10% deposit saved but not found the right house yet and having a baby this month so looking to buy after Christmas.

Also on the credit report he has had someone search his credit file every day and also companies such as 'quick quid' and 'payday loans' search. He gets texts from these all the time but has never applied - how can you stop them searching his file?

He pays our rent every month and we have been saving £800-1000 a month however we are decreasing this to £500 as of this month.

Will we have a chance of getting a mortgage if he settles these accounts and shows that he saves and pays rent every month? Also looking to put a 15-20% down.

Thanks for any advice regarding this shocking credit file revelation!

The_Boss

Ouch. I don't think there is any chance of you getting a mortgage after Christmas. Defaults, even if satisfied, will scare mortgage lenders off, especially as recent ones as 2012. It might not be until after Christmas 2018 that you'll become credible for a mortgage.

jagger86

Great news :-(

Could really have done with him on the mortgage seeing as he earns more than me and is the one that actually pays everything.

Will no banks/mortgage lenders look at the fact he pays rent + savings each month and that the mortgage repayments will be less than the rent even is.

Lioness_Twinkletoes

jagger86 wrote: »

Great news :-(

Could really have done with him on the mortgage seeing as he earns more than me and is the one that actually pays everything.

Will no banks/mortgage lenders look at the fact he pays rent + savings each month and that the mortgage repayments will be less than the rent even is.

No, because a mortgage is borrowing and he has demonstrated that he does not pay back what he has borrowed.

You could always carry on saving and wait another few years. use the time to improve his credit file.

jagger86

also if this is the case - then what is the point in settling any defaulted accounts? Surely there is no encouragement for people to pay things if it is still going to affect them for 6 years either way?

He will be paying his as only a few hundred pounds but looking at the bigger picture (people that owe thousands) surely they just don't even bother paying them if it is going to affect them for 6 years either way?

The_Boss

jagger86 wrote: »

also if this is the case - then what is the point in settling any defaulted accounts? Surely there is no encouragement for people to pay things if it is still going to affect them for 6 years either way?

He will be paying his as only a few hundred pounds but looking at the bigger picture (people that owe thousands) surely they just don't even bother paying them if it is going to affect them for 6 years either way?

That's would be an awful attitude. If you run up payments then you should pay them off. Often settlements are agreed that are much smaller than the actual debt and it's even more despicable if this lower amount isn't paid off either.

If you don't settle and still refuse to pay you could get a CCJ. While CCJs drop off, you will be asked on applications for some financial products if you've ever had a CCJ. If yes, that pretty much rules you out immediately. I was asked about this in two mortgage applications a few years ago and things have tightened up since then.

jagger86

Ok thanks for your response was just wondering. He will get these paid, it's just for interest charged on a small overdraft on two current accounts which he no longer uses. However he didn't close them down properly and didn't provide a forwarding address hence why he wasn't aware until we looked at credit report otherwise he would have paid them earlier (and for a lesser amount!)

The_Boss

jagger86 wrote: »

Ok thanks for your response was just wondering. He will get these paid, it's just for interest charged on a small overdraft on two current accounts which he no longer uses. However he didn't close them down properly and didn't provide a forwarding address hence why he wasn't aware until we looked at credit report otherwise he would have paid them earlier (and for a lesser amount!)

It's a shame that defaults like this can't be challenged if it was an honest mistake in an otherwise faultless history but the argument would be that he should have notified them of the change of address.

Neil_948

jagger86 wrote: »

also if this is the case - then what is the point in settling any defaulted accounts? Surely there is no encouragement for people to pay things if it is still going to affect them for 6 years either way?

He will be paying his as only a few hundred pounds but looking at the bigger picture (people that owe thousands) surely they just don't even bother paying them if it is going to affect them for 6 years either way?

As TB says it makes no difference whether they are settled or not to mortgage companies / Banks, However paying them off stops further action, as at anytime during the six years of the default the lender can escalate this to a CCJ, Which then another six years would be added from that date, And in essence could mean a relatively small amount could prevent further credit for a total of 12 years.