Banks keeping records of old debt

PHYTHIAN

I've looked in the usual places for an answer but can't find anything so hope someone here may be able to help with this scenario.

Over 15 years ago, a person defaulted on a loan and overdraft which still remain unpaid. They have nothing since and nothing shows on any Credit Reports. They want to go back to the same bank now and apply for a mortgage.

How likely is it that the bank will still hold details of the previous debts?

TBH I've told the person to steer well clear even though the debts will probably be SB, but thought I'd check it out with you folks!!

fermi

Allegedly some banks will keep a basic record of who has had bad debts with them in the past, but it's fairly likely they will have sold the debts on to collectors long ago.

Steering clear seems the obvious and most sensible plan just in case.

FireWyrm

Last time I asked the bank (my bank, yours might be different), they said that they do not keep records more than 10 years old and that this is then 'archived' which is not easy to access (allegedly). 15 years ago, there were hardly any credit reference agencies and they certainly would not have kept any details more than 6 years.

If the potential borrower has heard nothing about the debt within 6 years, then it is statute barred and nothing can unbar it. Even if they had a CCJ and that was not satisfied within another 6 years (we're up to 12 now) the creditor would have to return to court to seek permission to resurrect it.

It depends how desperately your friend wants the mortgage with this particular provider. They can only say 'no' after all and as long as this was a civil debt (not a mortgage) there is almost nothing the bank could do to recover the debt this far down the line anyway. I might be inclined to go along, all innocence and see what happens. No need to mention anything that old really - that's what CR agencies are for :-) Let them look.

poppasmurf_bewdley

FireWyrm wrote: »

Last time I asked the bank (my bank, yours might be different), they said that they do not keep records more than 10 years old and that this is then 'archived' which is not easy to access (allegedly). 15 years ago, there were hardly any credit reference agencies and they certainly would not have kept any details more than 6 years.

If the potential borrower has heard nothing about the debt within 6 years, then it is statute barred and nothing can unbar it. Even if they had a CCJ and that was not satisfied within another 6 years (we're up to 12 now) the creditor would have to return to court to seek permission to resurrect it.

It depends how desperately your friend wants the mortgage with this particular provider. They can only say 'no' after all and as long as this was a civil debt (not a mortgage) there is almost nothing the bank could do to recover the debt this far down the line anyway. I might be inclined to go along, all innocence and see what happens. No need to mention anything that old really - that's what CR agencies are for :-) Let them look.

I would challenge the section above which I have highlighted.

My late Mum worked for a credit reference agency in Manchester in the mid 1960's, although of course there were no computers. It was all done with box files and cards. I remember her saying that she was surprised at who she knew who had bad debts!

My Mum also worked as a supervisor for mail order catalogue firms like John England and Brian Mills, and frequently had to deal with people who were refused credit because of these agencies. Again, this was in the 1960's.

So they've been around for more than 15 years.

FireWyrm

poppasmurf_bewdley wrote: »

I would challenge the section above which I have highlighted.

My late Mum worked for a credit reference agency in Manchester in the mid 1960's, although of course there were no computers. It was all done with box files and cards. I remember her saying that she was surprised at who she knew who had bad debts!

My Mum also worked as a supervisor for mail order catalogue firms like John England and Brian Mills, and frequently had to deal with people who were refused credit because of these agencies. Again, this was in the 1960's.

So they've been around for more than 15 years.

Interesting. Perhaps a better form of words would have been 'not widely used or reported to'. Credit Reference Agencies only work if they can gather large amounts of data quickly which can be searched equally quickly. They only really became accessible easily with the advent of computers. In any case, even if you had been naughty some decade and a half ago, the information would have been purged long ago. Modern agencies claim not to hold anything over 6 years though I suspect it is merely archived rather than deleted.

poppasmurf_bewdley

I agree with what you say in your second post. We have to remember that in the 1960's, it could take at least a week to hear whether you had been accepted for hire purchase on a car. A letter had to go to the CRA, they checked and then wrote back to the finance company, who in turn made a decision and wrote back to the dealer, who then phoned the customer with the good (or bad) news.

And I bet in those days, they didn't dump the information after six years. Probably thousands of boxes still filled with old info are stored in cellars all over the country.

battyboimatt

A company can keep records for as long as needed for a specific reason, ie keep track of people who defaulted. I know this because when I was 18 I had an HSBC credit card and defaulted, even now im 33 they still wont let me have an account as when I applied for a current account it was rejected reason, you defaulted with us x years ago and it was never repaid.

PHYTHIAN

Thanks for the advice/input folks, much appreciated.

I was aware the debts would be SB but wanted to save my friend the embarrassment of being pulled up over the previous debts. His wife doesn't know about them. I told him he's making a mountain out of a molehill , but he insists he rather she didnt know even though they weren't together at the time.

sourcrates

It will depend on the financial institution, i know for a fact Halifax keep records for at least 15 years, others may be similar.

Why must it be the same bank ? there are many to choose from, as the debt wont show on there credit file, just try another bank.............simples.

rising_from_the_ashes

battyboimatt wrote: »

A company can keep records for as long as needed for a specific reason, ie keep track of people who defaulted. I know this because when I was 18 I had an HSBC credit card and defaulted, even now im 33 they still wont let me have an account as when I applied for a current account it was rejected reason, you defaulted with us x years ago and it was never repaid.

sourcrates wrote: »

It will depend on the financial institution, i know for a fact Halifax keep records for at least 15 years, others may be similar.

Why must it be the same bank ? there are many to choose from, as the debt wont show on there credit file, just try another bank.............simples.

I know I defaulted on B/C c/cards and eventually settled the accounts at a much reduced rate

My bank account was (and still is) with Barclays so it would seem they would still have access to the info if they wanted it

I now have a new c/card with B/C (with a rather imho eye-watering limit which they've just increased again) and frequently get offers of 'pre approved' loans when I log into my bank acct .....


I think it does depend on the lender

GingerFurball_2

If your debt was with Lloyds and it was defaulted or sold off to a debt collection agency, then I'd be very surprised if you could access any further borrowing from them.