Late Payments

edited 30 November -1 at 1:00AM in Credit File & Ratings
5 replies 605 views
jambofjambof Forumite
7 Posts
edited 30 November -1 at 1:00AM in Credit File & Ratings
Now that I am out of my DMP I've been checking my credit report constantly and updating where I can to see things showing as settled/satisfied.

I've signed up to all of the free ones and I was having a check of them today and noticed one of my accounts.

I had a loan with a credit union that was included within my DMP.

It is now settled but upon looking at my equifax credit report and the MSE Credit Club credit report I have noticed 2 things :-

Equifax - Status = Settled. Balance = Nil. However, this has never been defaulted, there have been late payment markers since Dec 15 up until it was cleared off in June 18, the last number before it was cleared off is 6. There is also a note on the file to say I was in a DMP and the account was being paid as part of that.

Credit Club - Status = Closed. Balance = Nil. As above this wasn't defaulted and I have had late payment markers, in the exact same way reaching 6 before it was changed to settled.

Sorry for the long winded story but my questions are :-

Is the late payment doing more damage to my credit report than a default?

When is the late payment removed from the file, the first date it was registered, or the last date before it was settled?

Should I speak to the credit union and request that a default is registered rather than late payments?

I appreciate my credit report is shot to pieces but want to try and improve it in anyway possible.

Thanks

Replies

  • [Deleted User][Deleted User] Forumite
    0 Posts
    MoneySaving Newbie
    They may apply the default, they may not.

    It's down to the lender
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K Posts
    ✭✭✭✭
    Hi jambof


    When you're in a DMP some creditors choose to show this on your credit file, rather than registering a default. The benefit of a default being registered is that the debt must be removed 6 years after the date of the default. Where no default is registered the debt is removed 6 years after the date the account is closed or settled.


    That means if the account was closed in June 2018, the debt will not be removed until June 2024. Had a default been registered shortly after you started the DMP, the debt would be removed from your credit file much sooner but you would live with the default until then.


    What the creditor has done isn't incorrect. If you would have preferred a default to have been registered you can ask them to consider doing that but they do not have to agree. If they do agree to register one make sure it is backdated to an appropriate time (usually once arrears are 3 to 6 months).


    Best wishes


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • jambofjambof Forumite
    7 Posts
    In the long term is a default better?

    If that is the case I will go back and see if they would register that on my file, rather than the late payment.

    The default would be off by 2022 rather than 2024 for the late payment marker.
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K Posts
    ✭✭✭✭
    Hi again jambof


    There's an argument to say a default looks worse than a late payment, but you would need to weigh that up against the fact that the debt could be removed quicker if a backdated default was registered. We also need to remember the creditor may not agree to register a default even if you want them to.


    What are your plans for the future? Are you looking to take out more credit or a mortgage? If you're thinking about a mortgage it's a good idea to get advice from a mortgage broker about which would look better on your credit file.


    Good luck with it all


    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • jambofjambof Forumite
    7 Posts
    Thanks for the reply Susie.

    Plans for the future are to get a mortgage with my wife - we currently live in a flat she owns.

    I will speak to a mortgage broker and see what they suggest.

    Thanks!!
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