Blocking RAC taking more money. Will my credit score be affected

themorganator4

Hi all.

I have scrapped my car and therefore no longer require rac breakdown cover (this is breakdown cover only and not insurance). I called up to cancel and they wanted 55 quid!!. So I have decided to cancel the direct debit and ignore any "we have been unable to take payment" letters.

Now my question is: will this affect my credit score? I feel that it won't as it's not a form of credit but just want to check

nomoneytoday

Did you sign up for a year?

themorganator4

Not sure, there was the option to pay monthly or yearly. I chose monthly

Arleen

If you signed to X more payments then you are likely stuck to paying whatever early-exit clause is in the contract. Not doing so means that they can go and take the case to court and/or report the default on your credit file. It all depends on the agreement you've signed.

themorganator4

I'll await the letters. I'm sure they will threaten court action if this is a route they can take and if so then I'll pay up but I suspect I will just get a few "don't lose your cover" letters

tenchy

Arleen wrote: »

If you signed to X more payments then you are likely stuck to paying whatever early-exit clause is in the contract. Not doing so means that they can go and take the case to court and/or report the default on your credit file. It all depends on the agreement you've signed.

Only if they were already reporting your account.

Arleen

tenchy wrote: »

Only if they were already reporting your account.

Not quite, it's common for, for example, water companies to not report accounts until they go into a default. You can of course complain and then they will report your healthy account, but they rarely bother on their own.

tenchy

Arleen wrote: »

Not quite, it's common for, for example, water companies to not report accounts until they go into a default. You can of course complain and then they will report your healthy account, but they rarely bother on their own.

Water companies operate outside normal DP principles when it comes to credit reporting. I'm not aware of any other type of commerical organisation that's permitted to do so. To reiterate - if the RAC is reporting your account to the CRAs (unlikely), they will be able to file a late payment marker and eventually a default. If they are not reporting your account, they won't be able to do so. They could, however, still go for a CCJ.

[Deleted User]

You don!!!8217;t have a score to be affected.

However if you signed up for a contract then you!!!8217;ll need to pay the cancellation fees or risk the account being handed to a collection agency and additional fees being added

System

You signed up for a year, there's no partial term cover. When you pay monthly you sign up to a credit agreement. If you default on that, which you have, they can report that to the CRAs. The debt companies they'll pass the default onto most certainly will report to the CRAs.

The RAC can legally pursue you for the rest of the money and don't think that "it's just £55 so they won't bother."

Browntoa

It never fails to amaze me that people are surprised that they actually have to finish a contract and think that cancelling the direct debit makes it go away