Credit report showing defaults

Old_Guys_Drool

Hi

I'm looking for some advice with regards to my credit rating as shown on Noddle.

In Oct 2011 I defaulted on 2 credit cards after failing to pay for 2 consecutive months. In both cases I came to an arrangement with the lenders (Marble and NatWest) to pay a reduced monthly amount based on my income and expenditure. This wasn't done through a 3rd party but directly with the companies, I think this is called an AP (Arrangement to Pay)?

Since then, I haven't missed a single payment for either card. Marbles sold my debt to Capquest after about a year, and I continued paying the agreed amount directly to CapQuest.

On checking my credit file with Noddle, the status history of my CapQuest history was AR with a green circle (I think this means Arrangement to Pay is in force) every month from Dec 2012 to Oct 2014. Since then, every month is listed as OK. There is no record of the card from when it was with Marble. So far, so good.

However, the status of the NatWest history is less than stellar. Despite having stuck to the agreement, and not missed a monthly payment since Nov 2011, my account shows as being in default, for every single month from Oct 2011 up until now.

I called NatWest for advice, and was advised to ask for this to be rectified by email, which I did. Today I received a letter from NatWest, basically stating the following:-

"As the default was not satisfied, a termination notice was sent to you. The letter advised you that, unless we rec'd payment of the full outstanding balance, or repayment proposals that were acceptable to the Bank, your details would be registered with the CRAs. Your account was then registered with the CRAs, to show a default." The letter goes on to say that the default will remain registered for six years from the original date of registration, and carries the full approval of the FCA.

Questions.

Firstly, why are NatWest allowed to show my account constantly in default, when the CapQuest showed AR for about 2 years after they bought the debt, then OK for the last year?

Secondly, the letter NatWest sent me seems contradictory. It states that "...unless we received ... repayment proposals that were acceptable to the Bank, your details would be registered with the CRA's. Your account was then registered with the CRAs to show a default". How can this be, since I made an Arrangement to Pay with them, in which they agreed a frozen/reduced interest rate and reduced minimum payments? Looking at my report, I even increased my monthly payments to them following a review in June 2013, from £36 to £55, yet still my account shows as a default for every single month since the AP was in place (unlike my other card with an AP, which has been green for years)?

What can I do to get this situation remedied with NatWest?

Many thanks

PS There is still an outstanding balance remaining with both CapQuest and NatWest.

Hazzinho

Simple answer is once you default you stay in default, it reports default every month until the debt is satisfied. It will stay on your for for 6 years from the default date. Your arrangement stays on until you settle the debt and stays on 6 years from the closure retaining all history under 6 years old.

fermi

As said, once a default has been registered the manlthy status shows a D or an 8 every month, no matter waht sort of arrangement you have with the creditor. It's just the way these things are show, and does not mean you are failing to pay the arrangement. The default and status history related to the original contractual payments, not any informal arrangement to pay, so if the lender considers that the account originally defaulted then that is what the status says.

Definition of when a default occurs and whet levels of payments are acceptable before that happens are mostly down toi the lender, although there are some guidelines from the ICOP on this.

These are the ones that were applicable in 2011-14

http://webarchive.nationalarchives.gov.uk/20100428141142/http://ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.pdf

You can have a look at that and see if you feel what has been done is fair, though it's not an easy read.

ashp_2

So you got a D for every month since the default? Wow.

I also had a default in 2011 not with either of the company's you mentioned but I didn't pay a penny for 3 years. When they eventually caught up with me I settled in full however I only had the one "D" for default back in 2011. This has just come off my report last month.

If you got a "d" every month from 2011 till now they will still be on there in like 2021. If that's the case that seems wrong to me.

fermi

A D every month in the status history are NOT new defaults. They are what should show on a defaulted debt, and if they don't then there is something wrong with the reporting on your file.

They also do not stay on your file longer than the original default does. The entire account, and every status history marker, balance, everything is still completely removed 6 years after the original default.

ashp_2

fermi wrote: »

They also do not stay on your file longer than the original default does. The entire account, and every status history marker, balance, everything is still completely removed 6 years after the original default.

Out of interest if your still paying the debt more than 6 years after the default date. How would the account show? Would it still show a "D" until late the accounts settled?

fermi

ashp wrote: »

Out of interest if your still paying the debt more than 6 years after the default date. How would the account show? Would it still show a "D" until late the accounts settled?

No, as said 6 years after the original default date ALL trace of the account is removed from your report and nothing further appears. That applies even if the account is not fully paid off at that time. Anyone checking your report will not see any sign that the account ever existed.

Old_Guys_Drool

fermi wrote: »

As said, once a default has been registered the manlthy status shows a D or an 8 every month, no matter waht sort of arrangement you have with the creditor. It's just the way these things are show, and does not mean you are failing to pay the arrangement. The default and status history related to the original contractual payments, not any informal arrangement to pay, so if the lender considers that the account originally defaulted then that is what the status says.

Definition of when a default occurs and whet levels of payments are acceptable before that happens are mostly down toi the lender, although there are some guidelines from the ICOP on this.

These are the ones that were applicable in 2011-14

<snip>

You can have a look at that and see if you feel what has been done is fair, though it's not an easy read.

Thanks for the link. Section 21 seems the most applicable to my circumstances, and it doesn't seem as if NatWest have followed this advise at all.

Arrangements to pay
21 An ‘arrangement to pay’
This involves a temporary, short-term (up to six months) arrangement
where the lender agrees to accept reduced payments.
ƒ The original payment terms will still be shown on the credit reference
file and arrears will accrue which will be shown on the monthly status
record.
ƒ The account will be marked by an ‘arrangement to pay’ marker
(which distinguishes the account from one where the customer has
behaved less responsibly).

Old_Guys_Drool

ashp wrote: »

So you got a D for every month since the default? Wow.

I also had a default in 2011 not with either of the company's you mentioned but I didn't pay a penny for 3 years. When they eventually caught up with me I settled in full however I only had the one "D" for default back in 2011. This has just come off my report last month.

If you got a "d" every month from 2011 till now they will still be on there in like 2021. If that's the case that seems wrong to me.

That's correct. It doesn't seem right to me either. I've tried to be responsible and followed the advice given (either on this or another consumer programme), and I will eventually pay off the entire original debt (plus a hefty amount in interest over the years).

I don't understand why CapQuest - a pretty ruthless debt recovery company - have marked my credit file as OK for some time now (despite owing more to them), yet NatWest, a high street bank, insists on showing a default each month for the last 4 years! To rub salt into the wound, I'm actually paying more now than what the minimum monthly payment would have been had I still been on the original terms!

I have managed to get a Capital One card which I'll use to try and improve my credit history, but I really wanted to get a re-mortgage done, and I stand little chance with these NatWest defaults showing up for 4 consecutive years (Northern Rock Together mortgage - another long story in its own right!)

Old_Guys_Drool

fermi wrote: »

No, as said 6 years after the original default date ALL trace of the account is removed from your report and nothing further appears. That applies even if the account is not fully paid off at that time. Anyone checking your report will not see any sign that the account ever existed.

That's a bit of light at the end of the tunnel I suppose. I was worrying that I would have to wait 6 years after the debt was paid off, which is another 2-3 years away.

Still confused as to why the Sharks (CapQuest) have treated my credit file more even-handedly than NatWest. Their customer charter says they are fair and honest, and put their customer needs first! Well, I don't think they're being fair with someone who has drawn up an agreement with them after falling on hard times, and has stuck to or exceeded that agreement ever since. My credit history would be just as bad if I'd done a bunk and never paid a penny.

HelpfulTips

The reason it shows is because what reports to the agencies is information relating to the original agreement you entered in to. As you accoint continues to be behind on payments each month - not saying you missed your arranged payments - but you are not meeting the oayments set out in the original agreement, technically their reporting is correct.
I don't want to come across and being awkward, just trying to help you with why it shows D.
Personally I don't fully agree with the use of CRAs, I can see the benefit and think they are extremely useful and necessary, but it's far too easy for small mistakes to ruin people's lives