Bank have closed my account

cj7ax

I had an student overdraft with HSBC and had a bit of trouble paying it back. Although I think the way HSBC tried get the money back borders on harrassment I hold my hands up and accept full responsibility for the debt. I am in position now to pay the overdraft if full (£896.81) but have received a final demand from HSBC. Unfortunately I have moved address and it has taken some time for the demand to reach me. I called HSBC who said that my account has now been closed and passed to a credit agency. I've phoned the agency but they are still waiting to receive the account details. Neither HSBC or the agency will accept a payment at the moment, but i'm also worried about the effect on my credit rating. I haven't received and default notices but wondered what would show up and how it affects my future

jonesMUFCforever

It will show as a default.
If the demand has now reached you it should show how to pay.
When you have paid off the debt your credit file should be amended to show the debt as settled.
I would send a cheque by registered post to the address on the demand.
If this is HSBC they will send it on to the collection agency.

cj7ax

Thanks for your help. Once the default shows as settled will it affect my ability to get a mortgage? Is there anyway I can improve my credit rating after this?

jonesMUFCforever

You can't do better than pay what you owe.
It might initially flag something up when a credit search is made on you but provided this was a one off should do you no long term harm.

dunstonh

cj7ax wrote: »

Thanks for your help. Once the default shows as settled will it affect my ability to get a mortgage? Is there anyway I can improve my credit rating after this?

It will serve as a negative against you.

However, providing you have a good deposit and are not stretching the income multiples and you give it about 6-12 months after settlement, then most mainstream lenders wouldnt be overly concerned with it.

cj7ax

Thanks to you both for your help. The only problem i'm having is that the agency HSBC have passed my details on to haven't set up a file so they won't accept a payment

Badger_Lady

HSBC did exactly the same thing to me - the overdraft was on a joint account; I had split up with OH and he had run up an overdraft he had no intention of repaying.

I never saw any default notices either, and only found out for the first time when I applied for a new mortgage this year - the first provider to run a credit check declined me because of it. It was also raised as a question when I applied for my new job!

However, another mortgage provider accepted me comfortably (at a very slightly higher rate than the original provider), and my employer was fine - they just had to add a note.

As soon as I could afford it, I paid off the outstanding debt via the DCA (easier than trying to get ex-OH to do it!), and my credit record is on its way to healing again...