OLD defaults - company only offering partial settlement? advice appreciated.

krs360

Hi,

I have two old Lloyds accounts which defaulted in 2010, both are Lowell accounts but I deal with two other companies on their behalf (BW Legal and Resdons). One is around £480 (OD) the other £950 (Loan or CC). Without going into huge detail I had money issues from the back of a death within my immediate family. I've made payments toward these debts when money allowed - somewhere between 40-50 per month.

I've tried to get F&Fs from the company, however they are saying that I can pay 50% and it's still going to get marked as partially settled. I guess that these will drop off my credit report at some point next year either way?

Do you think I should pay the 50% and let it be marked as partial with the view it will drop off next year or is it in my favour to pay in full?

Also when these debts drop off, what sort of impact will this have on my credit score? Any finance I've had since 2009/2010 has been kept up to date for the most part with no further defaults on anything. It's in the late 500s at the moment which is quite poor.

Appreciate any advice.

Tixy

Hi
Yes the records will drop off next year regardless of whether shown as fully satisfied, partially settled or unpaid.

Whether it is worth paying in full depends on whether you are likely to be applying for credit within the next year, and if so what.

Once the accounts drop off your credit file they will no longer have any impact on your ability to get credit.

Don't focus on the credit score, potential lenders assess your credit report, not the score that an agency will sell to you (which lenders don't see).

krs360

Hi - thanks for the reply.

I was just approved for a Barclaycard which has now allowed me to transfer the higher interest cards I had over the recent years with the full 3 years balance transfer int free and 6 months free on purchases from inception of the card.

I'm considering just doing the partial settlement just to close the accounts as it's unlikely I will need any credit in the next 12-18 months, the next line of credit I will want will be a mortgage.

The only other factor is that it's likely I will get married next year and wanted to work out the impact on my partner's credit file. I don't want it to be detrimental to her, as it's something that happened to me almost six years ago and that seems unfair.

If we get married, what implications are there credit wise? Her credit score is basically as good as it can be.

Tixy

Being married doesn't create a connection in terms of credit files.

Having joint accounts (such as a mortgage / joint bank account etc) creates a financial association on your credit files and means your partners ability to get credit could be affected by your credit file.

So ideally don't have any joint accounts until the defaults have all fallen off.