to pay or not to pay defaults before mortage applciation

fr4nk

Hi All,

I got into some debt in mid twenties, lost job, debt went bad usual story. One was a for a £7k credit card that the lender took to around £10k before taking me to court, I got a CCJ before my old man lent me £3k to pay them off as a final settlement. I have that and 2 other defaults on my credit file and they are about 4 years from default currently. I want to apply for a mortgage (things have since turned around) in about 12/18 months time with my partner (excellent credit) but my question is this:
Am I better paying off my defaults now (about £700 in total) and have them (as I understand it) showing on my file for 6 years from now or waiting till the 6 years is up from date of default, (I'd be waiting another 8 months or so beyond my 18 month target, renting but saving more for bigger deposit) but they would go unpaid but disappear off my credit file completely before I apply to get the mortgage?
I currently have an adverse credit credit card that I pay off in full every month with a good limit and a bank acct with lots of direct debits that are always paid so I should have a fairly solid credit history if I do wait till everything is gone too.

thoughts? pay and have on file or not pay and wait?

National_Debtline

Hi fr4nk and welcome to the forum.


The danger of leaving those defaults to drop off is that there's no guarantee that those creditors won't sue you in the meantime if they're not being paid. Of course, you might be in a position to pay them off promptly before the CCJs were entered, but by then you would be forking out a couple of hundred extra £ for court costs.


Pay them now and the defaults will still drop off your file at the same time, but you will have removed any lingering possibility of them taking legal action.


Dennis
@natdebtline

fr4nk

Hi Dennis, Thanks for replying

One of the defaults is £130 for a phone contract, one is £330 for a credit card and the other £454 for a bank account (I spoke to Halifax regarding this and they say HBOS have a policy of not selling debt to third parties and they wont chase me for it) basically, They are not going to go to the hassle of suing me for such trifling sums. However from what you are saying, it contradicts what I believe, that if I pay them off they will not "start again" a new 6 years from date of payment, ie be on my file till 2021 as opposed to 2017?

Are you able to please clarify?

National_Debtline

Hi again fr4nk


Once the defaults drop off, all trace of these accounts should disappear from your file altogether - that would include any settlements. The only marker that should outlive a default would be a CCJ.


Dennis
@natdebtline

fr4nk

Hi Dennis, I am confused. My defaults were in 2011/12. If I do nothing they will drop off in 20/17/18. However if I pay them off now will they not still show for another 6 years from the date they are paid?

glentoran99

fr4nk wrote: »

Hi All,

I got into some debt in mid twenties, lost job, debt went bad usual story. One was a for a £7k credit card that the lender took to around £10k before taking me to court, I got a CCJ before my old man lent me £3k to pay them off as a final settlement. I have that and 2 other defaults on my credit file and they are about 4 years from default currently. I want to apply for a mortgage (things have since turned around) in about 12/18 months time with my partner (excellent credit) but my question is this:
Am I better paying off my defaults now (about £700 in total) and have them (as I understand it) showing on my file for 6 years from now or waiting till the 6 years is up from date of default, (I'd be waiting another 8 months or so beyond my 18 month target, renting but saving more for bigger deposit) but they would go unpaid but disappear off my credit file completely before I apply to get the mortgage?
I currently have an adverse credit credit card that I pay off in full every month with a good limit and a bank acct with lots of direct debits that are always paid so I should have a fairly solid credit history if I do wait till everything is gone too.

thoughts? pay and have on file or not pay and wait?

that doesn't happen, they drop off 6 years from default date paid or not

glentoran99

fr4nk wrote: »

Hi Dennis, I am confused. My defaults were in 2011/12. If I do nothing they will drop off in 20/17/18. However if I pay them off now will they not still show for another 6 years from the date they are paid?

No they wont