6 years after debt is paid???

holty1983

Hi I wonder if anybody can help!

About 5-6 years ago I fell in to some financial difficulties.
At the time I had a loan and credit card from Lloyds. I ended up falling behind with payments and things were getting quite bad, so I decided to go to a Debt Management company. They contacted Lloyds and came to an agreement and now I just pay the management company not Lloyds directly. Anyway to cut a long story short, I called Lloyds because I found that on my credit report (even though there was an agreement made between the Debt management firm and Lloyds) that even though I have never missed a payment with this firm, on my credit file Lloyds keep marking every payment as Default, and when I called them about this they said that it doesnt matter that there is an agreement in place or not, once the Debt is passed over to their recovery team it will be marked as a Default until the last payment is made and then it will stay on my credit file 6 years after that. Even though not one payment has been missed through this company and the agreement has been kept to. This to me does not sound right. Because surely, if an agreement has been made and kept to i.e, paid on time and the amount required, how is this a default???

Any help would be much appreciated!!!

Regards

Holty1983

fermi

holty1983 wrote: »

they said that it doesnt matter that there is an agreement in place or not, once the Debt is passed over to their recovery team it will be marked as a Default until the last payment is made and then it will stay on my credit file 6 years after that.

They have got part of that right and part of that wrong.

It is a default as you did not keep to the original contractual payments.

The history recorded on your file is in relation to the original credit agreement, not any informal agreement you or a debt management company may come to after you defaulted.

So it is correct for it to be a default and stay that status.

It is not saying you are defaulting on the DMP agreement, as monthly status codes having nothing to do with that.

Now the thing they got HUGELY wrong there, and which is good for you, is that what they said about it staying on for 6 years from the last payment is complete nonsense.

That is true for accounts that have not had a default recorded, but for accounts that have, the default, and in fact the whole account and every single trace of it, is removed from your report 6 years from the initial recorded default date.

So if this account was recorded on you file as a default nearly 6 years ago it should be coming off your report completely very soon. The default, account, and complete history gone.

HappyMJ

A defaulted debt will remain on your credit file for 6 years from the date of default. If you are in a DMP it will drop off your credit report after 6 years....not the final payment.

It's a default as you aren't keeping to the original agreement.

You only get one default not one for every late payment. i.e the debt is in default not each payment. You could miss further payments but you won't get a new default as the debt was already in default.

My explanation probably isn't very good. Find out your default date and wait for 6 years and check your credit report the month after and the debt shouldn't be on it.

HMB1981

I can concur that this happened for me, it dropped off 6 years after default, despite me making payments after the default.