Full & Final Accepted - Repercussions of Partial Settlement

lifibrown

1st Credit have agreed to accept a 50%' full and final settlement' for a £3100 debt which will be marked as 'partially settled' on my credit file. It is about three years since the account defaulted, I moved to Oz for a couple of years and foolishly left a bank account with an overdraft and didn't make any payments. My gran is willing to lend me the money to settle the debt once and for all.

Does having a partial settlement on your credit file look any better than a default that has not been settled?

dobbollah

if its defaulted already id definitely settle, it will sit as a default for 6 years from the default date and then fall away...

partially settled or full payment the default remains so save some money....

sourcrates

It won't make one iota of difference unless you are planning to apply for further credit.
The further back in time a default is, settled or not, the less impact it will have.
Do the deal and get rid !!!!!!

lifibrown

Myself and my partner are hoping to apply for a mortgage. I realise it is entirely unlikely that I will be able to be on it too and therefore it will be in his name, however if the debt was settled in full would that make any difference?

bennyhill_2

Have you looked at your credit file to see if the default has been recorded?

lifibrown

Yes it's been recorded. As has another. I have paid off the account that that money was due to. I realise that it is highly unlikely that I will be able to get any other credit but if there is a way to do so then I'd rather take that option i.e pay off the full amount over a longer period rather than partially settle at 50%.

Since returning to Oz I have missed no payments on my credit card, in fact they have put the limit up twice and I have opened a basic account with another bank which I have my salary paid into and have never had any problems with.

Will any of this more recent 'good' credit history negate the defaults any?

sourcrates

If you have two defaults, a mortgage will be out of the question, lenders will pick over your credit file with a fine tooth comb, affordability is the key word nowadays, and bad info will rule you out with high street lenders, there lending criteria has tightened up considerabley since 2008.
I hate to burst your bubble but I fear you will have to wait until time heals your credit file before you can apply for a mortgage.

lifibrown

Yeah I thought as much. Three year wait it is. I am then in a quandary as to whether to settle the amount in full just now or agree monthly payment terms? As it seems either way I am not going to be able to get further credit.