Confused about default removal

counterfeit

Six years ago today my house was repossessed. It was the last in a long line of financial problems.

Since then, I have worked extremely hard to sort out my finances and everything is now sorted out. Today should be the day that my mortgage default is finally removed from my credit file which will give me a completely clean record.

Today, coincidentally, is the day my Clearscore file had its monthly update. Noddle and MSE club follow next week. I logged into Clearscore not expecting my mortgage default to have been updated instantly and was expecting it to be shown on the updates next week.

However, it wasn't showing on my file as a default. It had been updated yesterday by the mortgage company and was showing as a closed account.

I assumed it would only move when it dropped off from being a default as I am still making monthly repayments.

Can anybody advise why it's classed as a closed account when it clearly isn't if I'm still paying it back? And why would they make that alteration when it's due to drop off my file a day later?

mrmagooooooo

The Default date i suspect would have been a while before your house was actually repossessed. I could be wrong on that though.

Anyway a default as it sounds like you are aware will stay on your records for 6 years. as that has passed the Default has dropped off and the account closed.

If you have been and still are paying them monthly repayments towards this debt although the account it technically closed as far as the CRA's are concerned the debt is still very much live. So for instance if you stopped paying them they could still take you to court and register a CCJ against you ruining your credit files all over again.

So that said. Well done in getting your finances in order, sounds like you have done a cracking job there and you can now be happy your credit file is back on track :-)

counterfeit

mrmagooooooo wrote: »

So that said. Well done in getting your finances in order, sounds like you have done a cracking job there and you can now be happy your credit file is back on track :-)

Thanks for that and ironically, my credit score is low because my "credit card limits are too low" (direct quote from clearscore). Not that I'm bothered. I'm never applying for another mortgage or loan so I don't really care. All I care about is it's now clean.

Chappaz

counterfeit wrote: »

I assumed it would only move when it dropped off from being a default as I am still making monthly repayments.

Can anybody advise why it's classed as a closed account when it clearly isn't if I'm still paying it back? And why would they make that alteration when it's due to drop off my file a day later?

Not to scare you or anything, but I'd advise making sure that the repayment plan is still active and your mortgage provider is still happy with it.

One of the reasons accounts can suddenly close like that is because the debt is sold on to a debt collection agency. The provider then considers the debt settled and closes the account, but the collection agency suddenly appears with the same debt demanding payment for it.

I may be wrong here, but I believe lenders can do this any time, even if you've agreed to a repayment plan, because you've technically broken the original terms and conditions of the mortgage.

And this can happen around 6 year marks, because unpaid or unacknowledged debts become statute barred and unenforceable after this time, so they tend to sell the debts before then to recoup what they can. Although that only applies if the debt has not been touched or acknowledged in any way for 6 years, which wouldn't apply in your case as you've been repaying it over this time.

It's probably nothing, but it may be best to get in touch and find out, as it is unusual for an account to be closed if payments are on-going, and this can be one of the reasons.