Mortgage Application and 5 year old debt randomly appearing - please help

SBOSlayer

Hi all,

I was wondering if someone could please share some knowledge on this.

I checked my credit file and found that an old loan (which I am still paying off) has appeared. This was originally a Credit Union loan, which was closed in April 2012 and then transferred to a Debt Collection Agency. Since this has occurred I made a small amount of payments and finally agreed to £20 once I got a decent job. I actually was planning on paying this off this month, ironically enough!

However, the Union has defaulted me for the last 5 years on the loan and have the wrong information on this e.g. it says I pay £64 a month and the debt has been going down. This is incorrect (as there is only £300 left, not £600!) and also how would I default if it was going down? So here is my questions:

• If the original creditor closed the account in April 2012, can they now all of a sudden put this on my credit file? If so, is there a limit to the time they can put this on? After 5 years this seems ridiculous.
• If the debt was transferred to an agency, should they not be the ones reporting on this?
• I assume if I contact them they will correct this as per the April 2012 closure? If so, I can live with this…. But, I’m not want to continue to rage for another 6 years for the mistakes of my past to go away 

This is quiet upsetting as I went to apply for a mortgage today, but was denied. I’ve worked really hard since I’ve been a student to pay off debt and pay bills on time. I was finally seeing the light at the end of the tunnel, even to the point my one and only default fell of last month and I hit the 843 mark on my score (even though scores are rubbish anyway, still nice to see).

Please help 

Thanks in advance.

[Deleted User]

It sounds correct, if the default date is from 5 years ago.

An account can be in default and still take payments and thus the balance reduces.

If the default date is 5 years ago,then it will drop off within the next year.

SBOSlayer

Hi, Thanks for your reply.

I was lead to understand however, that if the account was closed down from the original creditor they shouldn't be reporting any further?

Thanks

[Deleted User]

With an outstanding balance being chased, it wouldn't have been fully closed.

Was the debt sold, or was it just passed to a DCA? Who owns the debt? It sounds as if the CU still holds it.

SBOSlayer

It was passed to DCA in April 2012.

Thanks

Hazzinho

It will stay in your file for 6 years from the default date, just make sure the DCA haven't pushed the default date back, it should be the same as in the original account.

Once you default an account it remains in default whether you decide to pay it off or not as you breached the agreement.

On the plus side you won't have long to wait if it's 5 years old, may as well save more money.

Arleen

It's worth reminding that within those 6 years they can take it to court and get a CCJ against you so I would highly advice against "head in the sand" approach. And that date refreshes with each acknowledgement of the debt, which includes payments, so while the debt may fall off your credit file, that doesn't mean you don't owe the money anymore, and that you cannot be chased up for it.

So just pay back the money you owe, and as conditional ask them to fix the default date for 5 years ago (easier to do than arguing for months) and within a year your file will be squeaky clean.

Thrugelmir

SBOSlayer wrote: »

This is quiet upsetting as I went to apply for a mortgage today, but was denied. I’ve worked really hard since I’ve been a student to pay off debt and pay bills on time.

Yet you've stretched out paying off an old debt.

finally agreed to £20

Sometimes being too clever comes back to hit one like a boomerang. You can't have your cake and eat it.

From a lenders perspective they receive more applications than they accept. They therefore set the bar as high as need be to filter them out.

SBOSlayer

Hi,

Thanks all for the replies. It turns out they never issued a notice and in addition I was never informed of the payment to pull it up to scratch. They may potentially remove it.... still waiting to hear back, so possibly good news.

Arlene, thank you. Was offered that option today, so will likely do that.

To the guy on about stretching it out... well there was more important debts to pay . Fun times being a student.