Best steps to improve my rating

SteevT_

Sorry for the extremely long post.

I have multiple defaulted accounts and money owed from reckless borrowing when I was a little younger. I would like some advice on the best way to proceed as I want to take steps to improve my rating as quickly as possible.

All of these defaults are a few years old. I got told these will fall off my credit report after 6 years.

If I am around 3 years into this 6 year period, am I better to pay some of these debts off in lump sums/installments or just wait the additional 3 years until they fall off?

I am aware if I pay or re ignite these debts it can start this 6 year process again and I want my credit rating rid of all of the negative marks against it as quickly as possible.

Also as a second question, am I right in saying that if you live in Scotland, debt collectors can not come to your home and repossess your belongings? If I move to England after these debts were taken out does this change and mean debt collectors CAN now chase me?

Help please

Tixy

You are correct that the entries will fall off your credit file 6 years after the default date. This will happen regardless of whether paid on unpaid at that point or the date of the last payment you make.

Making payments now won't make these debts appear for any longer on your credit file.

The risk of hoping to wait it out and make no payments is that your creditors could decide to take court action against you. They have 5 years to take court action against you from the date you last paid towards the debt or wrote to acknowledge the debt.

Did you live in Scotland when you incurred these debts?

If one of your creditors did obtain a decree against you then there are a number of enforement options available to them to try to recover the debt (such as an arrestment of your bank account or your earnings.

Bailiff action to recover debts in Scotland is I believe less common than in England/Wales, but is still a possibility, known as an attachment order or exceptional attachment order in Scotland.

SteevT_

I lived in Scotland and the address the debts are to is in Glasgow.
I have now moved to London however I have not updated any of my bank details or any of my accounts to reflect this.

So what do people refer to when they say you can reactivate your debt and the 6 year period?

Tixy

They are referring to the limitation act - how long a creditor has to take court action against you.
Which is 5 years in Scotland and 6years in England/Wales.

That is totally separate to dates of default on your credit files or the credit account entry on your credit files.

SteevT_

So if I start to repay these debts, how will my credit rating be affected if these things are going to fall off regardless?

Tixy

If you start repaying the debts your creditors should update the outstanding balance field on your credit file.

If you pay off a debt in full before the 6year anniversary of the default date then the record would be changed to show a satisfied default rather than a current default.

Whilst the credit account entries will fall off your credit file after 6 years, if a creditor obtains a court decree against you then that will be on your credit file for a further 6 years from the date of the decree.

Anthorn

It's not true that debts fall off your credit report after six years if you clear a debt. In that case the debt is settled and stays on your credit report for six years after the settlement date. Still a settled debt is better than a default. True that any time within the six years a CCJ can be obtained and in that case the debt can never be statute barred. It's something of a gamble whether to not pay and risk a CCJ while hoping for the six years to elapse to gain statute barred status. Personally I cleared all my debts without exception.


It's something of a long haul to repair a credit history: Get new accounts and not all the same type of credit: I recommend a SIM only monthly mobile phone contract, JDWilliams account and Vanquis credit card to start. Then later get a current account with an overdraft however small. Always pay on time, never go over-limit and avoid CCJs like the plague.

Tixy

Anthorn wrote: »

It's not true that debts fall off your credit report after six years if you clear a debt. In that case the debt is settled and stays on your credit report for six years after the settlement date.

As these are defaulted accounts then they will fall off the debtors credit file 6 years after the default date regardless of whether paid or not at that date.

It is only account entries without defaults that stay on file for 6 years after the settlement date.

Anthorn

Tixy wrote: »

As these are defaulted accounts then they will fall off the debtors credit file 6 years after the default date regardless of whether paid or not at that date.

It is only account entries without defaults that stay on file for 6 years after the settlement date.

Read my paragraph starting with, "It's something of a gamble ..." You are assuming that the debts will stay as defaults for the full 6 years but the OP may be forced due to an impending CCJ to at least start settlement proceedings or else suffer a visit from the bailiffs particularly if the debt is sold on.

Scenario: A debt is due to fall off the credit report after 6 years in 2018. But in 2017 a CCJ is granted which will fall off the credit report in 2023.

Tixy

Anthorn wrote: »

Read my paragraph starting with, "It's something of a gamble ..." You are assuming that the debts will stay as defaults for the full 6 years but the OP may be forced due to an impending CCJ to at least start settlement proceedings or else suffer a visit from the bailiffs particularly if the debt is sold on.

Scenario: A debt is due to fall off the credit report after 6 years in 2018. But in 2017 a CCJ is granted which will fall off the credit report in 2023.

Even if they have to start 'settlement proceedings' or indeed settle the debt the defaults would still remain on file. And so the credit account entries for the debts will still drop off 6 years after the default dates.

In your scenario the credit account entries for the debts would still fall off the credit file in 2018. But as you say any court order/decree would still appear on file until 2023, all be it in a different section of the credit file.

Anthorn

Tixy wrote: »

Even if they have to start 'settlement proceedings' or indeed settle the debt the defaults would still remain on file. And so the credit account entries for the debts will still drop off 6 years after the default dates.

In your scenario the credit account entries for the debts would still fall off the credit file in 2018. But as you say any court order/decree would still appear on file until 2023, all be it in a different section of the credit file.

You are not taking into account that there is another party, the creditor. If the debt is sold on particularly to the likes of Lowell Portfolio then a CCJ before the 6 years has elapsed is amost certain.


Yes the CCJs are in a different section but one that is actively accessed by lenders and is probably the first section to be accessed!