Partial Settlement

pioneer22

Hi All,

Cutting a long story short I got myself in a bit of a mess debt wise and have around £1900 of arrears to payoff.

I happen to have 1600 of savings which I was going to pay off my debts with. Some of the creditors have offered me partial settlements .
What I was wanting to know is will this affect my credit score by using a partial settlement not full looking into the future? I am hoping to repair it and get another house in 3/4 years time. I would like to pay them all off with what I have put aside so if I can reduce some of them that would be better.

Thanks in advance.

National_Debtline

Hi

Your debts will show as partially settled if you agree a reduced lump sum payment. It’s difficult to say how this will be perceived by potential mortgage lenders as they can interpret it in their own way. It’s possible that for some lenders it may not be a seen as positively as paying the debts off in full, although I wouldn't expect it to be a major issue. For others they might put so much focus on other areas such as affordability and deposit size, the partial settlements may not be a factor at all.

James
@natdebtline

owen_money

Although it may vary between different lenders and products, I had two partially settled credit card accounts 3 year ago and have had no issues in obtaining credit, including a car loan, mobile phone contract and a credit card (got 15 interest free and£8k limit). In fact I've had credit card offers from the company I has a partial settlement with.
I think a lot of other factors also come into the mix when lenders decide who to give credit to.
Overall history probably plays a bigger part, CCJ's, late payments etc.....

pioneer22

Thanks you 2 thats helpful to know.

How long does it take to repair credit scores from being in arrears?

[Deleted User]

It's nothing to do with scores.

The longer you demonstrate good credit behaviour, the more favourably lenders will view you, according to their individual criteria.

sourcrates

pioneer22 wrote: »

Thanks you 2 thats helpful to know.

How long does it take to repair credit scores from being in arrears?

Credit scores are meaningless numbers invented by credit reference agancies, your question should of been :

"how long does it take to repair my credit history ?"

This would depend on the lender and there own policies, some look at your last 6 months credit history, some go further back, it's impossible to say without asking every individual company in the uk, but typically the further back in time negative info is, the less effect it will have on you.............should you wish to get into debt again !!!

pioneer22

sourcrates wrote: »

Credit scores are meaningless numbers invented by credit reference agancies, your question should of been :

"how long does it take to repair my credit history ?"

This would depend on the lender and there own policies, some look at your last 6 months credit history, some go further back, it's impossible to say without asking every individual company in the uk, but typically the further back in time negative info is, the less effect it will have on you.............should you wish to get into debt again !!!

Thanks! My god I wish i wasnt so irresponsible when I was 21.