How does a Partial Settlement affect future credit?

Th3_W12ar6

I have been paying into a DMP for about 7 years and, although I still have a little outstanding, a relative will be giving me some money in a couple of months which should enable me to be able to offer a 50% settlement to pay off the remaining debt and end the DMP.:j I have informally contacted a few of my creditors and they seem happy to accept this but say my credit file will be marked as Partially Settled.



My question is really what effect having accounts marked Partially Settled will have on any applications for credit I make in the future. My accounts went into default at the start of the 7 year DMP repayments but as this is more than 6 years ago I am assuming these defaults will no longer show on my credit file and all that new lenders will see is that I have a history of making agreed payments consistently on time into a DMP for 6 years.



I have been living without credit for 7 years and have no real desire to get any now but after making the partial settlement is there any point in applying for a sub-prime credit card to start rebuilding my credit history or should I simply leave it for 6 years for the Partial Settlement to drop off my file and then apply for a conventional credit card?

The_Boss

You should check your credit files really to see what's being shown before applying for sub-prime. I assume the defaults will be gone, but it's been known for them to wrongly stay on a bit longer sometimes. You can do the free monthly trials with Experian/Equifax or pay £2 for statutory reports. If you do the former, make sure you ignore their "scores" as these don't mean anything in the real world.

Partially settled is better than not being settled but bear in mind it might not be showing at all, which would be even better for you.

fermi

Th3_W12ar6 wrote: »

My accounts went into default at the start of the 7 year DMP repayments but as this is more than 6 years ago I am assuming these defaults will no longer show on my credit file and all that new lenders will see is that I have a history of making agreed payments consistently on time into a DMP for 6 years.

Have you actually checked what is still on there?

If they had defaults recorded on your credit files more than 6 years ago, the accounts should not show on your files at all.

Defaulted accounts are removed completely from your credit files 6 years from the recorded default date. Everything about them is removed and nothing more is ever recorded, even if they are still being paid off. After that drop off there is no sign they exist or ever existed.

Th3_W12ar6

Thanks guys. I have followed your advice and applied for a Statutory Report. It will be interesting to see what it shows!

Thrugelmir

If you choose the partial settlement route you can cross those lenders off your Chrismas card list, some possibly forever.

All actions have consequences.

glentoran99

Thrugelmir wrote: »

If you choose the partial settlement route you can cross those lenders off your Chrismas card list, some possibly forever.

All actions have consequences.

Surely once off your credit file its gone?

That said it wouldn't be the partial settlement that would put lenders off it would be the default

The_Boss

glentoran99 wrote: »

Surely once off your credit file its gone?

That said it wouldn't be the partial settlement that would put lenders off it would be the default

They would still have a record of the person on their internal system - and while "credit black lists" don't exist, lenders will have their own blacklist based on those that have defaulted and not paid back what they owed. It's similar with "internal credit ratings" where a lender assesses you based on your behaviour with the financial product(s) in question.

Thrugelmir

The_Boss wrote: »

They would still have a record of the person on their internal system - and while "credit black lists" don't exist, lenders will have their own blacklist based on those that have defaulted and not paid back what they owed.

We always referred to in the past as the "Do Not Trade with List". No explanation is retained as to why.

glentoran99

The_Boss wrote: »

They would still have a record of the person on their internal system - and while "credit black lists" don't exist, lenders will have their own blacklist based on those that have defaulted and not paid back what they owed. It's similar with "internal credit ratings" where a lender assesses you based on your behaviour with the financial product(s) in question.

If that's true then I doubt it would make a difference though if you settled in full
Or a partial settlement on a defaulted account though? They still aren't going to want you

Th3_W12ar6

The_Boss wrote: »

They would still have a record of the person on their internal system - and while "credit black lists" don't exist, lenders will have their own blacklist based on those that have defaulted and not paid back what they owed. It's similar with "internal credit ratings" where a lender assesses you based on your behaviour with the financial product(s) in question.

I must admit that this is something I was expecting... That if I had ever defaulted with a lender then I have trashed my chances of EVER getting credit from them again (even after 6 years) due to them keeping my default on their own private internal records for eternity.

Hopefully though, after 6 years, I should be able to apply to other lenders ok. ALTHOUGH with so many lenders being subsidiaries of each other (or running other companies card services for them under the other companies name) it may be a minefield trying to work out which lenders are linked to each other and so will have access to these internal blacklists.

Is there a table somewhere which shows the associations between various lenders (i.e. the companies which provide the backend services to supermarket credit cards etc)?

chanz4

Not 100% true, some lenders will relend others like next, amex will not