Does all debt drop off after 6 years?

bs121212

Hi. I have 2 defaulted loans which occurred during a difficult time I went through around 6 years ago. I have never really had the spare money to repay them in full or offer partial settlement, and its not really impacted me since I haven't needed credit. They have been sold on various times over that period, i just keep making the agreed payment regular contact and income and expenditures and the creditors are happy.

As 6 years has passed, one of these debts has just come off my creit file altogether, obviously I still owe the debt, but it got me thinking, is this actually the law? So when the 2nd loan comes up to 6 years which is very soon, will that lender also be required to stop sending info to the credit ref agency? The other loan is now with Lowell.

As i say, i will still owe the debt, but will these defaults and debts not being visible no longer impact on my credit score and file and my credit score start to improve, providing i am making payments etc... on my other agreements (utilities etc... and on electoral roll) i do also have a credit card whcih is paid on time every month

Thanks for any advice

sourcrates

Defaulted debts stay on your file for 6 years, then, as you say, they drop off, and creditors stop reporting their status to the CRA`s.

However, the debt is still enforceable, so you should continue to pay it, unless it is unenforceable because of something else.

Pay little attention to your credit score, its credit history that counts, the numbers are randomly generated, and mean very little in the real world.

bs121212

thanks for the reply. Yes i have seen that the defaulted debt has dropped off and there is no trace, which is obviously beneficial for me in terms of going forward, as i can repay to the debt owner on my terms.

What i was wondering though is that is this the case for all lenders. So after 6 years, no lender will be able to for example move a defaulted loan back onto an active credit agreement so it will show on my file as an outstanding loan?

sourcrates

The consumer credit act, and the data protection act, are applicable to ALL lenders.
A default will appear on your credit file for six years, even if you pay off the debt in full.

Any creditor who checks your credit file in this time will see the default. They'll take this into account if you apply for other credit.
After six years, the defaulted debt will be removed from your credit file, even if you havent finished paying it off.


It's important to remember that a default doesn't last forever. You'll find creditors are less interested in the default as time passes, and eventually it will disappear from your credit file.


An account can only default once.

poppasmurf_bewdley

bs121212 wrote: »

thanks for the reply. Yes i have seen that the defaulted debt has dropped off and there is no trace, which is obviously beneficial for me in terms of going forward, as i can repay to the debt owner on my terms.

What i was wondering though is that is this the case for all lenders. So after 6 years, no lender will be able to for example move a defaulted loan back onto an active credit agreement so it will show on my file as an outstanding loan?

I would not say that just because the debt has disappeared from your credit file, you can settle it on your terms.

The debt can still be taken to court, sold on, etc, until it is satisfied.