Default on Car Finance

WinterHale

Just after a bit of advice really on car finance and a default. Sorry if this is in the wrong area etc

Back in December 2014 I took out a PSA Car Finance which was for 2 years and the payments were roughly £198. In May 2015 I dislocated my knee and was advised not to drive for the foreseeable by drs. After lots of forwards and backwards, speaking with drs and PSA themselves, it was decided my best option would be to VT the car/finance as I was paying monthly for this and insurance and obviously unable to drive.
When theis was done and the car collected I was left with a balance of just over £4,000. The people at PSA seemed really helpful and they suggested I cut the monthly fee down to £100 until the balance was paid as I was not able to work at this time.
After 6 months I received a letter stating my account had defaulted and I would be left with a black mark on the credit rating for 6 years. After many angry phone calls it was clear that although this was not my fault (I was not told that this would ever effect my credit rating, I was just told £100 a month would be fine after VT after they suggested it) I was now still left with approx. £3,517 worth of debt and a default.
This has been quite ongoing and I have spoken to CAB etc and PSA have agreed they can/will remove the default as soon as the whole balance has gone but this is causing me problems in the mean time.

What I am wondering now though is, if I upped my payment back to the original £198 - would they start flagging up green again (rather than red) on my monthly chart on experian/noddle/etc or would it make no difference? I know the default would probably still be there until fully paid but would it look any better to banks etc?

There is only £1817 left and if I could pay it off in full now, I would. However, things aren't that simple. I'm at the point now where I can't even open a current account because of this so understandably I'm quite stressed. I can safetly say I never want credit again, but the possibility of being declined for a mortgage etc because of this is frustrating (This is also my first ever problem with credit etc. I always pay my bills on time and to the full amount - just this miscommunication has caused it to look like I don't!)

Hoping someone can help!

ACG

If you are currently in arrears, making the monthly repayments will not turn it to green. You need to be caught up for that to happen.

Personally, I would be surprised if they remove the default. They have a legal responsibility to provide an accurate reflection of your payment history. They would mark it as satisfied but that is about it I imagine.

I can see your point about them not telling you the reduced payments would show on your credit report, but being unable to use the car is not a reason to not make your payments. I do empathise with you as I do a lot of mortgages for people with bad credit and many of them say the same thing.

I think in your case it will just be a case of time being the greatest healer. You are nearly 3 years post default, so assuming you keep on top of your commitments going forward and dont do too many credit checks, you should be fine in the not too distant future.