Small amount of debt

davidswish

I'm looking to improve my credit file as having had this debt looming over me for years and I get refused credit if I try. I have some credit like a phone contract and the payments are on time with everything. I have a credit card with £2500 credit on and use £100 of that now and again, but I cant change this because of my file and it has 50% APR.

This debt is from an old Lloyds TSB card I used to have, they gave me it when I was at college based on the income from EMA (£30 a week). My mum used to pay £5 a month for it and that paid £200 off but that has stopped since July as i didn't want her paying it anymore. It is now showing as a default. It was with a debt collection agency but this has now gone back to the bank. I cant email them as they only deal with you via phone and don't offer you a receipt

I owe around £1060 and they offer me to settle this for £806
I'm happy to settle this as I'm now in work.

I don't mind paying the full amount but they say that if I pay the full amount it will be on my credit file for 6 years and I still won't get any credit, so what is the point in not going for the settlement?

I just want to get a mortgage or a car and get on with my life.

Can anyone give me some advice?

Kind regards,
David.

spadoosh

Have you looked at your credit report?

A settled default is better than an unsettled default although neither are good. I mean would you rather lend money to someone who eventually paid all be it very late and more than they shouldve done or would you prefer someone who has never paid. Unfortunately for the most part a default doesnt get past the computer says no part on application.

Not much you can do to avoid the default now. It will stay on your credit report for 6 years and will make getting credit more difficult (not impossible but reduced lenders and probably more expensive to borrow).

The good thing is it looks like youve been burned quite young (if its you in the photo) so should have less issues when you can actually afford a house (guessing you cant at the moment?!).

If i was you for the next 6 years i would be concentrating on living within my means and saving. Avoiding borrowing at all cost. There are good things about not being able to get in to debt, one of the main things is its usually cheaper.

davidswish

I have attached a snip of my report, it's not good.

I'll take your advice and pay the full amount off ASAP then, cheers.
I'm 28 so that's not that young haha. I know the amount is not that must and its a good learning experience but it's a shame that i will have this for the next 6 years. Getting a car outright isn't that common anymore. I have £600-700 disposable a month after all bills and living expenses so i'll put that in savings like you say.

imgur.com/a/5PnUu

spadoosh

Dude youre opening yourself up to internet fraud.

Youve got account specifics (the amounts and comapnies), what im guessing is your name as your username and a rough geographical location. O and a picture.

Be careful what youre sharing!!


The reason you should pay is if you dont in all likelihood the comapny will tak eyou to court, you will have a CCJ issued against you and youre starting a fresh with a new 6 years. So you could get to the last of the 6 years and then start all over again if you dont settle it.

I bought my car outright, with less than your monthly disposable income, its just not that shiny. Save for 10 months and you can buy a brand new and shiny dacia duster (although i wouldnt recommend buying a brand new car either)!