Help! Credit File Disaster!

silly_girl_debts

Hi All,

I am hoping someone can point me in the right direction hereas it seems most of the information I get is not accurate or correct for mysituation.

As my namesake suggests when I was younger early 20s I gotmyself into a bit of debt, working hardly any hours as a student and not beingable to meet payments I ultimately defaulted on several on my debts- to thetune of roughly about £6k spread over a couple of credit cards and studentoverdraft. A HUGE mistake which is affecting my life now I am actually in astable job which is relatively well paid. As I approach my 30’s I am keen to start saving for a mortgage but can’tsee how any lender would possibly give me a mortgage the way my credit file isat the moment.

A debt collection agency contacted me earlier this year andI have agreed to pay back two accounts monthly. However, having had a look atmy credit file- one of the debts (the largest one!) was due to ‘drop off’ thisJanuary coming. Now my question for this is- that the default date on thisparticular card is January 2009, would this still ‘drop off’ but with the debtcollection agency taking monthly payments? Or since they have already ‘lockedme in’ so to speak they can make sure that the debt stays on my file? Havinghad a look even though payments have been made nothing has changed on my file.The entry is the original date of default- can I assume this will leave myreport?

My other credit card reaches 6 year period next December. Ihave had no contact with this lender in well over a year. I was looking at waysto pay this back but have heard that ‘satisfied’ is almost as bad as defaulttherefore my question for this is it actually better for me to wait this oneout hoping it will disappear from my credit file end of next year?

I’ve buried my head in the sand for too long with regards tomy finances but now I am in a better financial position I want to make theright positive steps to repairing my file. I do have current lines of credit (carpayment, mobile, credit card) all of which are ALWAYS paid on time and in full,I won’t make that mistake again. However my concern is that I’ll never be ableto get a mortgage due to the mistake I made years ago. I realise this might beover most peoples head therefore I would be grateful if someone could give medetails of who is the best person to speak to about the 6 year drop off and whetherit is in my interest to wait it out or not.



Thank you for reading

Tixy

Hi

that the default date on thisparticular card is January 2009, would this still ‘drop off’ but with the debtcollection agency taking monthly payments?

Yes the account and default will drop off your credit file 6years after the default date shown on your file

Havinghad a look even though payments have been made nothing has changed on my file.

Is you have been making payments then the outstanding balance should be updated 'regularly' if is it not then it is worth complaining to the creditor.

My other credit card reaches 6 year period next December. Ihave had no contact with this lender in well over a year. I was looking at waysto pay this back but have heard that ‘satisfied’ is almost as bad as defaulttherefore my question for this is it actually better for me to wait this oneout hoping it will disappear from my credit file end of next year?

The default/account drop off your file regardless of whether paid/part paid or unpaid. The risk on an unpaid debt is that the creditor may decide to take court action against you - and if they obtain a CCJ which you do not repay within a month of judgement this would then be on your credit file for a further 6 years.

That said if there is ever a period of 6years where you make no payments and do not write to acknowledge the debt then the debt becomes statute barred, which then means you could defend any court claim against you (if you are in Scotland its 5years).

Do you know when you stopped paying these 2 debts originally rather than just when the 2 defaults were?

However my concern is that I’ll never be ableto get a mortgage due to the mistake I made years ago.

Nobody is ever permanently prevented from getting a mortgage, even people who have been bankrupt. Time will heal your credit report.
It can even be possible to get a mortgage with paid defaults showing on your credit file, although you will likely pay higher rates and need a higher deposit so it is usually preferable to wait until they have dropped off your file.

silly_girl_debts

Hi Tixy- thanks for replying,

Just to ensure that I am understanding correctly.

Credit Card 1 defaulted in January 2009. Therefore would effectively 'disappear' from my account this coming january 2015 DESPITE the fact that I am paying a monthly sum to a debt collector?

The fact that the debt collector doesn't seem to update the account really annoys me. As it looks as if its just sitting there with no action. I use equifax so to me it should be showing green for each month it is paid. Maybe I am wrong but they deleted the old account, took it over in their name and its just got the origingal default date on it.

Credit Card 2 defaulted in December 2009. I am NOT paying anythign towards this at the moment. Therefore its in my best interest not to pay this and let it drop off?

Tixy

silly_girl_debts wrote: »

Credit Card 1 defaulted in January 2009. Therefore would effectively 'disappear' from my account this coming january 2015 DESPITE the fact that I am paying a monthly sum to a debt collector?
Yes

The fact that the debt collector doesn't seem to update the account really annoys me. As it looks as if its just sitting there with no action. I use equifax so to me it should be showing green for each month it is paid. Maybe I am wrong but they deleted the old account, took it over in their name and its just got the origingal default date on it.
It shouldn't show green each month. It is correct to show the original default. The only thing that should change between when you restarted paying and Jan 15 is that the outstanding balance should be reducing. As it is going to drop off anyway next month its probably not worth a complaint even if it is not.

Credit Card 2 defaulted in December 2009. I am NOT paying anythign towards this at the moment. Therefore its in my best interest not to pay this and let it drop off?

That is a judgement call for you to make. Do you know when you last paid towards this?

If the creditor took court action against you within 6years of your last payment - could you afford to pay the whole debt in full in a lump sum?
If so then you may choose to risk not paying and only pay if they commence court action. If you cannot then there is a risk you could end up with a CCJ on your file for 6years - and so you'd need to decide whether it was worth that risk to you.

downhillfast

silly_girl_debts wrote: »

Credit Card 2 defaulted in December 2009. I am NOT paying anything towards this at the moment. Therefore its in my best interest not to pay this and let it drop off?

It may drop off your credit file next year but it is a long way from being statue barred... so they could hit you with a CCJ at any time if you don't pay it. Considering you are seeking this information to ready yourself for a mortgage at some point you really don't need to be getting a CCJ if you can't then clear the debt straight away.

It might be worth looking into whether the debt is enforceable as it's pretty old... I don't know much about how you do this but somebody else may be along shortly to explain...:)

silly_girl_debts

Thanks All- I appreciate the advice. I have been very stupid with my finances up until now.

This second credit card is the one that is causing me a headache. I would think its a stroke of luck for it to drop of my credit file but I wasn't aware that even if it was gone from your credit file they could still come after you. I will look up this statue barred thing again another termI was not familiar with.

I have a student overdraft which is defaulted and due to drop off on jan 2017. Again I have not heard anything from them and I am seriously considering writing to them as

1. as a student as the time I feel that it was unethical to give such a large overdraft to someone earning minimum wage and working 10 hours a week.

2. I don't ever remember them writing to me to tell me that they were going to 'default me' and I didn't even realise that an overdraft could default!

Does anyone think I have a chance here and could I maybe look at a template for writing to them and asking them to remove this?

Thanks

thebritishbloke

Chance of what? Not having to pay back the debt? Not a chance in hell, even if it froze over, thawed, and refroze the same day.

Most banks give students overdrafts of £2-3k, and most students get maintenance loans/grants to pay for their day-to-day expenses. You were the one who decided to spend your overdraft and not pay it back.

Have you changed address since you took out your overdraft? Did you stop using the account? They're allowed to recall in overdrafts at any time, i.e. they can turn around and say "Ok we want our £2,000 now please" and you have no real choice but to pay them.

silly_girl_debts

No I would be offering to pay back the debt but want to point out that I never received notification that the account would go to default.

Other than that can I just confirm I have 3 defaults on my file

card 1- January 2009
Card 2- June 2009
Card 3- December 2009

( 2009 not a good year for me!)

Can I assume that these will not be viewable to potential lenders after 2016 whether these debts are repaid or not. FYI I am currently paying back two of them.

Hazzinho

Yep that's correct they'll have dropped off by then.

Tixy

Regarding the overdraft default. When they write to recall the overdraft they will also say in that letter something along the lines of nonpayment will be recorded on your credit file or affect your ability to get credit etc. That would be the notification.

Statute barred is basically a time limit a creditor has to take court action against you. This is 6years in England/Wales.
But that 6years is from when you last paid or acknowledged the debt in writing (or for overdrafts from the date it was recalled if that was later).

This date could be many years after it drops off your credit file, or could be a few months before it drops off, as the default date on your file is not relevant to a debt being statute barred. Links to information about the Limitation Act and statute barred debts here - Statute barred debts and the Limitation Acts