Defaults on credit file!

Jaimiet88

Hi everyone!

I'm seeking some advice about my credit file!!

I have two default notices on my credit file from 2010 for £78 & £270.

I checked my credit report and have been given an understandably terrible score. I'm in a position where I can clear both payments and I'm now looking to improve my credit rating.

I've taken out a high interest credit card but not really sure what to do with these default payments....

Would it be better to pay the default sums on both accounts so they are classed as settled? If the payments are settled, would it drastically improve my score? Or should I wait until the 6 years have passed and it drops off my account?

Any help would be GREATLY appreciated!

Thanks!!

KirstyO

If there are debts outstanding it is best to clear them if you can and get the accounts closed. If the accounts are still open/debts still ongoing then this will still show even after the defaults have dropped off. If the accounts are settled and closed completely then these will appear in a different section of your credit file. I'm not sure how much difference it makes whether accounts are open or closed, but it gets them out of your way!


Rebuilding credit is a slow and steady thing, you're not going repair it overnight. Nothing wrong with the high interest credit card as long as you repay in full each month if possible to show responsible borrowing.

fermi

KirstyO wrote: »

If there are debts outstanding it is best to clear them if you can and get the accounts closed. If the accounts are still open/debts still ongoing then this will still show even after the defaults have dropped off. If the accounts are settled and closed completely then these will appear in a different section of your credit file.

Sorry, but no. That is not true.

Account with defaults are removed completely from your report 6 years from the default date. Paid off or not. There will be no sign they ever existed.

fermi

jaimiet88 wrote: »

Would it be better to pay the default sums on both accounts so they are classed as settled? If the payments are settled, would it drastically improve my score? Or should I wait until the 6 years have passed and it drops off my account?

Defaulted accounts would be marked as "satisfied" if paid off.

That may make a small difference to how lenders view your report, but the fact that the defaults are quite old reduces how much difference it might make.

Does depend on the lender's policy regarding them though, so hard to second guess.

Paying them off would remove the (unlikely?) chance of court action though.

murphyja

I also have a default but I made the mistake of settling mine and having to live with it for six years!!

I settled mine before I read all these forums where the common advise is use the out standing money as leverage to get your defaults removed.

Basically write to the lender concerned and say I can only secure funds to clear my outstanding debt on the proviso that you agree to remove both defaults on receipt of full payment. There is actually a template letter I have seen on the net which words it much better

Good Luck

Tixy

murphyja wrote: »

I also have a default but I made the mistake of settling mine and having to live with it for six years!!

The account and default still drop off 6years from the original default date, regardless of the date it was settled (if settled at all)

murphyja wrote: »

I settled mine before I read all these forums where the common advise is use the out standing money as leverage to get your defaults removed.

Basically write to the lender concerned and say I can only secure funds to clear my outstanding debt on the proviso that you agree to remove both defaults on receipt of full payment. There is actually a template letter I have seen on the net which words it much better

It is now very rare for a lender to agree to remove an accurately recorded default. A few years ago some credit providers used to do this more frequently (mostly places like catalogues/phones rather than banks).

Also as a caution, sometimes people have got a default removed and the credit provider then changed the entry to show an AP marker or string of missed payments, but then later realise that this has a much longer impact on them, as these are then on file for 6years after the debt is settled rather than from when it had defaulted.

Thrugelmir

murphyja wrote: »

I also have a default but I made the mistake of settling mine and having to live with it for six years!!

If you fail to settle them then the lender/service provider is highly possible not to conduct business with you ever again. A business won't play games even though you may think that calling their bluff is being clever. Some customers simply aren't the bother to deal with. A motto as old as the hills.

samlong1989

I am in a similar position.

Spent the past year paying off debt of around £2500

£800 left to pay, monthly payments being £75. I Feel like cancelling this after reading these forums!

Have a total of 5 defaults on my credit file - 2 are for the same debt (how annoying)

Question 1: Can a default be removed if it is for the same debt?

Questions 2: Is there any chance of me obtaining car finance with 5 defaults on my credit file?

Any advice much appreciated

forgotmyname

Dont forget they have 6 years to hound you and then take you to court for the money. If they take you to court then the bill gets even bigger.

Even after the 6 years some companies will still try it on.

Tixy

samlong1989 wrote: »

Question 1: Can a default be removed if it is for the same debt?

presumably this is one in the name of the original creditor and one in the name of a debt collector?
If so then if the original creditor's entry is shown as closed and shows as having been assigned to a fellow CAIS member then it is acceptable for both to show on your file.

If it doesn't show as having been assigned then the account/default should not appear twice and worth complaining about.

samlong1989 wrote: »

Questions 2: Is there any chance of me obtaining car finance with 5 defaults on my credit file?

It would likely depend on how old the defaults are / for how much / whether all settled, but I'd imagine its unlikely except for the real subprime 40%+ APR / ability to remotely disable your car if you miss a payment type deals. Which are definitely best avoided.

dumpyboy

fermi wrote: »

Sorry, but no. That is not true.

Account with defaults are removed completely from your report 6 years from the default date. Paid off or not. There will be no sign they ever existed.

Please can you tell sainsbury bank that 4 months in a row they reapplied the default blaming systems error as there a outstanding balance on it . It amazes me how many in banks think that if money is still owed after the 6 years of default the account should still show on your credit file