Partial Settlement, credit rating and 6 years

Benjo1988

Hi

Basically I'm aware that my credit rating hasn't been great over the years but I was surprised how poor it was. At 27 I'm getting to the age where I'm becoming disheartened regarding mortgages etc.

After doing the usual research of signing up to see my credit reports I've noticed that Nationwide have put a partial settlement on my file. This is regarding a situation whilst at Uni, that I became overdrawn (my card allowed me to withdraw cash after my balance become £0) and I had to pay about £3-400 back. I paid this back and asked my account I be closed. I admit that my naivety was mostly to blame but I was slightly announced that I was allowed to withdraw money, as far as I know if you ain't got any money in your account they you can withdraw from a cash machine.

Anyway, I fail to see why this has been settled as a partial settlement and now I'm
Wondering if this has effected my credit score and previous credit applications?? It will be six years in July that I defaulted and heard it will be removed my my credit file at this point?

Will this automatically improve my credit score? Can I appeal this decision so long after it happend? I certainly want advised about this or that it would effect my credit score (again maybe my naivety, but you don't really learn about this stuff before uni)

Any replies but be really helpful

[Deleted User]

Your score is irrelevant of course, but once the default has fallen off, lenders will view you more positively.

If you want to understand how the account came have a partial settlement flag, then you'll need to go back to Nationwide, but don't be surprised if they can't tell you much after this time.

I'd take it as a lesson learned and move on.

National_Debtline

Hi

It’s possible that a partial settlement may not be viewed as positively as a debt being fully paid off, but that’s up to each potential lender. For some it may not be an issue, and with mortgages I think various other factors are more important e.g. deposit size, affordability, job stability etc.

The credit score you see on your credit report is a very rough guide and isn’t something a potential lender would see. Even if the partial settlement was bringing your score down it wouldn’t matter too much if a lender didn’t have a particular issue with it. Then again, it's also possible it could have affected some of your credit applications in the past.

You’re right that the default will drop off your credit file completely after 6 years of it being on there. From that point it wouldn’t be a factor in a credit application at all, so would be positive in that respect.

I’m not sure why your report was marked as partially settled if you paid the balance off in full though. It is something that can be challenged if you can demonstrate you paid off in full.

In terms of assessing your chances of getting a mortgage you could try contacting a mortgage broker that doesn’t charge an upfront fee. They should be able to give you an idea of whether any lenders they work with might give you a mortgage, or at least the steps you need to take to improve your chances. This MSE guide to mortgages talks about using brokers in section 3:

www.moneysavingexpert.com/mortgages/best-mortgages-cashback#topbrokers

Starting a Help To Buy ISA is also a good idea if you don't already have one.

James
@natdebtline

[Deleted User]

Benjo1988 wrote: »

I'm not sure how this was a helpful reply other than to make me feel stupid by patronising me?

Thanks.... Of course.

My reply informed you that your credit score is meaningless. So this may help relieve your downheartedness.

My reply advised that to understand if you can appeal against the partial settlement flag, you need to speak to Nationwide to understand why it was applied.

My reply advised that after so long, with the default about to drop off, you may be better simply moving on.

If that's not the advice you were after, perhaps you could clarify what you want to know?

Thrugelmir

The past happened. Move forwards.

Have you opened a Help To Buy ISA?