Defaults

leighavfc

Hi all

I have just checked my credit score on clear score this evening, and i noticed that a lot of my debts havent had default markers placed against them (nearly 3 years into SC DMP). Now im sure i have read somewhere before that it may be better for my credit file going forward if i have them corrected as defaults from time of my account defaulting rather than the marker for period of time since the debt was settled.

Does this sound right to anyone or am i dreaming that i have read this somewhere ?

Westminster

It is likely that you would be better off with defaults registered rather than AP.

The reason is, that one an account reaches the 6th anniversary of a default, all history of the account is removed from your credit files (along with any negative impact it would have on future applications).

Without a default, any account will remain visible on your credit file until 6 years after it is closed. An account will not be closed on your credit file until it is settled - which will be when you finally finish paying it off.

So instead of the records being clean 6 years from when you defaulted, the accounts will be visible from 6 years AFTER your DMP ends.

Unfortunately it seems to be more common for creditors to avoid issuing defaults. The cynic in me believes that they are doing this on purpose as the long term damage to your credit file is then not limited to 6 years.

The other unfortunate thing is, that it is only ICO guidance (not rules) that say a creditor should place a default on your account after a certain number of months where you do not meet contractual payments.

You may be successful in challenging this with the creditors (I was with a few).

However, MBNA did not agree and the FOS also agreed with MBNA that they claimed they were 'helping me out' by agreeing a partial settlement etc so they did not have to place a retrospective default.

For me, the upshot was that my MBNA account was visible for nearly 2 years beyond the end of my DMP. Fortunately, that did not prevent me getting a good mortgage once the DMP was settled and the history of it was removed from my files.

Head over to the Debt-free-wanabee board for some current advice on how to start tackling this as the finer details may have changed since I was in your position back in 2013/14

Anthorn

leighavfc wrote: »

Hi all

I have just checked my credit score on clear score this evening, and i noticed that a lot of my debts havent had default markers placed against them (nearly 3 years into SC DMP). Now im sure i have read somewhere before that it may be better for my credit file going forward if i have them corrected as defaults from time of my account defaulting rather than the marker for period of time since the debt was settled.

Does this sound right to anyone or am i dreaming that i have read this somewhere ?

Sticky wicket as cricketers like to say:

To start with the DMP could have the effect of stopping the default status being applied. According to ICO guidelines debtors who are making an effort to pay should not be placed in a worse position than someone who have made no effort to pay.

Secondly, what is the current status of the accounts? Note that closed accounts similarly drop off 6 years after they were closed.

Lastly, You may need to haggle over the default date since the debts drop off 6 years after the default date. But as far as I know lenders are not obligated to default a debt at all.

leighavfc

Thanks Westminster and Anthorn for your replys.

Westminster, sounds like im in a very similar situation to you. When they have paid then off then i will request my accounts being put into default and see what happens from there. Ideally they will all put me on default and my debt will erase quicker. if not im going to have to wait until 6 years after debt settled.

Anthorn, Yeah that would make sense as i am willing to pay and why should i be treated the same...but then on this occassion i would

Current state of accounts is most of them are still open for at least the next few hours until i start making the phone calls to them to pay them off :beer:

I suppose im just going to hope they agree to default request!!

sourcrates

Get a written complaint sent in, ask them to default you, and preferably backdate it to when your DMP first started.

There's no guarantee they will do so, but if you kick up a fuss about it you have a reasonable chance of success.

tell them it's unfair for them to further tarnish your credit file for longer than 6 years.

See how you get on.

leighavfc

Yeah i think il ask over phone when i ring them to pay up and if nothing can be agreed there then i will get a written complaint in!! Fingers crossed they help me out but i wont bank on it!

It will take the shine off being debt free if i have to wait another 6 years for them to drop off, i really just want my life to be on track for the first time since ive been an adult.