Settled Defaults

adriaen

So I was made redundant just over 18-months ago and it took me about 9-months to find another job through various unfortunate circumstances. During this time I had a credit card and a phone bill run into default (May/June 17).
I am now in a position to repay these debts (about £3k) in total. However, I have been offered a 50% reduction on both debts.
How will paying these debts help me short-term i.e. will it improve my credit score (currently 460-ish), let lenders see I am debt-free?
Is paying all better than a partial settlement? This is probably the most important one as if paying less means the same thing to my credit file then I would ultimately rather pay less.

Thanks for the help!

[Deleted User]

Ignore your score - it’s made up.

The debts will show as settled or partially settled and will drop off 6 years from closure.

Whereas a fully paid debt is marked as satisfied and will drop off 6 years from the date of default I.e sooner than a settled debt

https://debtcamel.co.uk/settled-or-satisfied-credit/

National_Debtline

Hi Adriaen and welcome to the forum


If you were to accept the full & final offer of 50% the debts on your credit file would be marked as partially satisfied (assuming defaults were previously registered for these debts).


If you pay the debt in full they will be marked as satisfied. The difference to prospective creditors is with a partially satisfied debt they will know you paid an agreed reduced amount, whereas a satisfied debt has been paid in full.


Either way the debts will be removed from your credit file 6 years after the date of the default. You need to weigh up how soon the debt will be removed from your credit file, how likely you are to apply for more credit, and how important it is to save yourself 50% of the debt.


Just make sure you have written confirmation of the full & final settlement before making the payment.


Best wishes


Susie
@natdebtline

stevenhp1987

!!! wrote: »

Ignore your score - it’s made up.

The debts will show as settled or partially settled and will drop off 6 years from closure.

Whereas a fully paid debt is marked as satisfied and will drop off 6 years from the date of default I.e sooner than a settled debt

https://debtcamel.co.uk/settled-or-satisfied-credit/

Any defaulted debt drops off 6 years from the date of the default.

The link you've given even states that.

Partially settled debts still show as satisfied on your credit report (with a marker that it's partially settled) so they are removed 6 years after the default date.

I think there is little difference between partially satisfied and satisfying a defaulted debt in full.

I'd take the 50% option.

[Deleted User]

stevenhp1987 wrote: »

I think there is little difference between partially satisfied and satisfying a defaulted debt in full.

I'd take the 50% option.

It shows to potential future lenders you had issues in the past and couldn't afford to pay back all that was owed