Loan payments that have fallen off credit rating, but still making payments.

Anon12345

Hi,

I am hoping someone can advise on the below for me, as the more I read, the more confusing it gets.

My husband took out a loan before we were together in 2008. He then defaulted on the loan a few months later. He then started making payments again to a third party collector/solicitor in 2009.

The 'defaulted' account fell off his credit rating in December 2014, but he is still making monthly payments and has been for 4/5years (smaller amounts) to this third company.

We are now saving for a family home and hope to be able to get a joint mortgage later this year.

I just wondered what the best thing is to do about these payments, as if he can stop making these payments without any credit damage and use it towards our mortgage deposit, it would be money better spent.

However, the more I read, the more I don't know what to do. Should he keep making small payments to this company, even though it's dropped off his credit rating?

I am concerned if we:

1) made a settlement payment, it would create a new account on his credit score saying 'settled'? Which would stay another 6 years?

2) if we stopped paying any money to this third party, do they have the right to reinstate as 'defaulted' and set up a new credit report on his file?

We would really appreciated any advice.

Many thanks

fermi

No, they cannot do (1) or (2).

Once a defaulted account drops off your credit report 6 years after the default, that is it. It can never be re-added as a credit account in that section of your report no matter what you do or don't do.

That is not to say he can just stop paying without consequence though.

It could go back on his report in the form of a County Court Judgement (CCJ) if the creditor decided to take legal action a got a CCJ awarded that he was then unable to pay off in full within a month.

Anon12345

Thank you for your help and advice.

I think I will get him to call the company to discuss a settlement then, as I was concerned if we did this, it would show up again as a new account.

Many thanks.

harveybobbles

Or stop paying if its dropped off his credit file? Sounds like he's been used as a cash cow for many years?