Irresponsible Lending

bamgbost

Some years back, I was very foolish with money. Lived aneasy come, easy go lifestyle.
After maturing a little, I am now at the stage, where I ampulling myself together and making good headway with my finances.

I am now looking towards a mortgage application and thoughtit best to review my credit file.
I now see that I have 2 defaults both from late 2010/early2011.

One was for a Loan and the other for a 2k overdraft. I hadn’tpaid them back at the appropriate time and arrears became defaults.
Now I take responsibility for that, as I remember it fully well.
They were both with the same high street bank, and went into arrears anddefault at the same time.
Now, I eventually paid them off, on an arrangement when I graduated andthey are marked as settled.

However at the time they were both taken out, I was a student. I.e. Had noreal income coming in.
Does this mean that these “credits” were given out irresponsibly?

I just wondered, is there any chance that I have a case to get thesedefaults removed from my credit history, due to them being given to me “irresponsibly”?

Or isit just a hit I have to bear for another 2 years?

bamgbost

Or will it all just come to be as an irresponsible borrower?

[Deleted User]

It sounds more like irresponsible borrowing. If you don't feel your income is enough to service a loan, then you shouldn't apply.

It may have been a higher risk move for them to lend to you, but they are allowed to operate at the risk levels at which they are comfortable.

edthehead

Don't worry. You're not the only one. I did exactly the same but my issue was the bank manager just handed me (a student with 0 income) a credit card and basically said - there you go - go spend!

A bit annoying I know. both on my part and the bank manager. I was broke, went in to extend my overdraft and was given a credit card instead.

A few years passed and Lloyds were after this money plus my graduate overdraft. I wasn't working and was on JSA. Then one day the just started swallowing my Job Seekers Allowance. ALL of it. I moved banks and continued to ignore them.

I then started receiving bailiff letters. I then had started work so decided to set up a payment plan but then realised that Lloyds had been illegally withdrawing my JSA even after I told them it was all the money I had to my name.

Took all this to the Ombudsman - took months and months but finally come to a decision that Lloyds did act responsibly. They did refund all of those bank charges and fees (£800) but the were not interested in removing my defaults.

Now I'm in the same boat as you. Looking to apply for a mortgage even after paying the debts off in full last summer and my rating is 1/5 from noddle and just as bad for equifax. (default dates 2011 and red marks against each month thereafter).

Anyway, I hope this helps. It's a pain in the backside. I even took out a credit card to rebuild my rating. Had it for a year, paid off in full each month and it's still made no help at all.

DCFC79

edthehead the 1/5 from noddle means absolutely nothing.

enthusiasticsaver

Well done on sorting out your finances but I think that you may need to bear with the defaults for a few years and wait for your credit record to be rebuilt. When you do intend to borrow it might be an idea to go to a bank with which you can demonstrate you have borrowed responsibly.




I do not think you can lay your defaults at the banks' door as even though you were a student this does not necessarily mean no income. Most students have some form of income, whether it is a student loan, parental help or a part time job. There is an onus on the borrower to ensure if they take out a loan or a credit card they have both the means and the intention of paying it back. Consequently I do not believe you have a case for getting the defaults removed.


I would concentrate on saving hard in the meantime and count yourself lucky you have learned a hard lesson early in life to not borrow if you cannot afford to pay it back. It will serve you well in the future.

andyfromotley

Ha! If student overdrafts are ever deemed to be irresponsible lending then the compo will make ppi look like loose change!

Sadly I don't think you have a case. The general view seems to be that u should should only borrow what you can afford.

bamgbost

fair enough guys. worth a shot!

Quite scary how I could get a 5k loan, with no income. (only student loan).

Plus btw andy... it was a student overdraft. I had a student account already. This was an overdraft to a normal current account.

Hey-ho that's life. I guess a tough lesson for us all to learn from.
and Good luck with it Ed!!