Hire purchase in default

S_ann1987

I'm trying to sort out my credit rating I want to get a mortgage next year but my credit rating is so low! I was very stupid when I was younger like a lot of us are and I didn't repay credit cards. I lived off pay day loans. All this is sorted now and some of these still appear on my credit report and I understand these will be on for a number of years. However I got a car on hire purchase for an ex (I know stupid!) anyway it ended up going back and the account has been settled nothing is owed. But on my report this still says in default and is the only item on my report that says this. Being new to this I don't know if it should still say this and if I can correct it? Also is it having a major impact on my rating?
Thanks!

Candyapple

Even if the account has been settled and you no longer owe the company any money, because you failed the meet the original payments your account went into default and therefore the default status now showing on your credit file is correct as it is factual.

Whatever defaults you have on your credit files will remain there for 6 years from the default start date. And yes, defaults will have a major impact on your credit rating and if you are looking for a mortgage next year you definitely won't be getting the best rates and will need to look at using a specialist mortgage broker to advise if there are any lenders on the market who will lend to you with your credit history.

Here_Comes_The_Judge

S_ann1987 wrote: »

I was very stupid when I was younger like a lot of us are and I didn't repay credit cards.

Not me sister.


If I were you. Save like mad. No more credit. Wait 6 years for the squeakiest cleanest credit report ever. Then apply for your mortgage. Probably with a 50% deposit, on account of all that saving.

S_ann1987

I have three years to wait then until it's cleared! I will be applying for a mortgage with a deposit greater than 15% I'm currently working full time whilst in uni studying to be a social worker. The only item I have on credit now is my sofa! Me and my partner are on minimum wage affording big items is hard, we don't go on holiday and we don't have a car. But renting right now costs more than what we would be paying in a mortgage.

macman

Nothing you can do; the debt will show as 'satisfied' on your report, but the fact that you defaulted remains on file for six years, as that accurately reflects your credit history. Any mortgage offer you get will take the much higher risk into account.