Confused about partial and full settlement

neilneedshelp

Im just after someone to clear something up for me if they can.

I am in a position to offer 100% of balance to 2 creditors which both debts have defaulted on my credit report.

Does the default stay on your account for the full 6 years even if you pay the remaining balance in full. From which I understand is classed as settled or does it drop of your report like it no longer exists?

If it remains on your account as defaulted for the full 6 years am I simply better off going partial settlement, as a full Settlement will have no difference on my credit report as it has already defaulted? I hope this makes sense.

Thanks

xHannahx

Yep, will remain as a default for 6 years after default, regardless of settlement

neilneedshelp

xHannahx wrote: »

Yep, will remain as a default for 6 years after default, regardless of settlement

Thank you, I have been reading for 2 nights to try to figure that out.

jo6526_2

May not be relevant but thought if share my experience. I'm in process of trying to get a mortgage, my husband defaulted in 2010. In 2013 they suggested partial settlement, husband did that and he was advised this would not be any more adverse than default itself.

Fast forward 2.5 years and we are having trouble getting mortgage, Barclays said that had the default been settled in full then it would have been better but as it was partially paid they've declined our application.

We only found out today

immoral_angeluk

A default is a default, it'll screw up your credit rating regardless. Some creditors may take any kind of settlement as a small bonus, but in reality ANY default is going to put you out of reach of any prime mortgage.

jo6526_2

Should have pointed out we are trying get mortgage year before default drops off his record. Unless you were planning on getting credit within 6 years then partial settlement may be an option for you.

lynns3cookies

jo6526 wrote: »

Should have pointed out we are trying get mortgage year before default drops off his record. Unless you were planning on getting credit within 6 years then partial settlement may be an option for you.

I was going to ask that as I was wondering how they would know.

sourcrates

Every lender credit scores differently, all have differing criteria for granting credit, there is no "one size fits all" solution to this.

Defaults and negative information, such as a partially settled debt, stay on your file exactly 6 years, then they are expunged, as though they were never there.

In order to know if a partially settled debt looks better than a settled debt, you would need to know the creditors lending criteria, which no one does, so it's a pointless endeavour in reality, settle for whatever you are comfortable with, then wait till your file clears itself in time, before applying for mortgages etc.

neilneedshelp

I wont be requiring credit again so I am just trying to pay off my debt to help improve my future credit rating. I hopefully wont require credit again but I can never say never. I would like to be clear with no negative scores on my credit file in 4 years. I have targeted 4 years as thats how long is left on my defaults.

Hopefully If I settle with the 2 creditors that leaves me with one 12k loan which I can overpay as I will no longer require the DMP I am in, so will be saving an extra £90 a month towards it. 4 years seems along time but slow and steady hey.