Paying off old debt and credit file

Jamestysoe

Hi. Hopefully someone will be able to advise on this as I’m getting different answers currently from who I’ve called.

I have some debt that defaulted over 7 years ago. My credit score is good again and I pay small payments to each of the creditors I owe each month without fail.
Luckily I will shortly be getting some inheritance that will help me pay off these debts. I also want to be able to start looking at getting a deposit down on a home. Thing is I would obviously need a mortgage.
Currently these debts don’t show on my credit file at all as they are so old. I have been informed that if I do a full and final settlement to them or partial, this would bring these debts back up and be visible again on my credit file. Although it will say they are settled i feel it could still have an impact on me getting a mortgage.
Other advice I’ve been given is to keep it as it is and try and get a mortgage whilst continuing to pay these debts off with these small payments. Although I would obviously have to declare I have debt. Which again could impact me getting a mortgage.

Is there any advice on this? It would be greatly appreciated

Willing2Learn

Jamestysoe wrote: »

Luckily I will shortly be getting some inheritance that will help me pay off these debts. I also want to be able to start looking at getting a deposit down on a home. Thing is I would obviously need a mortgage.
Currently these debts don’t show on my credit file at all as they are so old. I have been informed that if I do a full and final settlement to them or partial, this would bring these debts back up and be visible again on my credit file. Although it will say they are settled i feel it could still have an impact on me getting a mortgage.

The debts are permanently removed from your credit files, six years from the date of default. They cannot reappear just because you have settled the accounts.

If it were me, I would get the ball rolling by sending off written requests to your creditors for a valid CCA. This will prove whether the debts are enforceable or not. If the debts are unenforceable then it will improve your bargaining position when agreeing a full and final settlement.

Do not make a full and final settlement before you have received a written response confirming the acceptable amount to be paid.

[Deleted User]

Jamestysoe wrote: »

I have been informed that if I do a full and final settlement to them or partial, this would bring these debts back up and be visible again on my credit file.

You've been informed by a dimwit, unfortunately.

Once dropped off your file, they won't come back, unless you stop paying and they gain a CCJ against you.

It wold be well worth clearing these before applying for a mortgage, as lenders won't be overly impressed with you dragging out old debts.

You need to give the impression that you would be willing to make the contractual payments for a mortgage.

Jamestysoe

Thanks. I was trying to find a good organisation to call that would 100% confirm that they wouldn’t reappear but haven’t found one.

Also if they are over 6 years old does that mean it won’t have any impact if I choose full or partial? Partial means more mortgage in future. Although morally I feel I should pay it all off.
Trying to figure out best step!

Jamestysoe

The debts are all debt collection agencies (who hve been amazing over the years tbh) and not the original creditors, so wasn’t sure if they would be able to put a mark on my account once I’ve settled with them.

Willing2Learn

Jamestysoe wrote: »

Also if they are over 6 years old does that mean it won’t have any impact if I choose full or partial? Partial means more mortgage in future.

The defaulted credit accounts are no longer on your files and cannot be reinstated to show whether you have partially settled or settled in full. Only you and your creditors would know that information.

Jamestysoe

Thanks for your help.
Silly young me getting into debt 8–9 years ago!
I feel i should pay them the full balance off but then like I say, if it doesn’t reappear on my credit file, then why not partially settle and use what I save to help towards the deposit. Each year passes it’s getting harder and harder to become a homeowner. I’ve learned a lesson with my debts and certainly won’t ever let that happen again

[Deleted User]

If they’re no longer in your file then by all means make an offer for full and final settlement.

How much was the debt originally, how much is outstanding, how long have you been paying them for and how much do you currently pay per month?

Jamestysoe

The total debt across 3 of them is approx 8k. It’s a small debt in this day and age but nonetheless it’s a debt.
I’ve been paying £5-10 a month every month for the past 6-7 years. So there’s still a lot to pay off.

I’ve had letters from the debt collection agencies offering me discounted settlements several times but Just have not been in the position to pay them. Letters say “ where appropriate your credit file will show default partially satisfied when making a settlement opposed to default satisfied when account is paid in full.”

This is why I was uncertain whether If I agreed a discounted settlement that it would appear on my credit file even though the original creditors were defaulted over 7 years ago.

[Deleted User]

They won’t appear on your files as they are over 6 years old.

Phone them up, make a settlement offer, start at £1 (seriously) and just go from there

sourcrates

Jamestysoe wrote: »

Thanks. I was trying to find a good organisation to call that would 100% confirm that they wouldn’t reappear but haven’t found one.
!

Three of the best sources of information on debt..........


https://www.nationaldebtline.org/EW/Pages/default.aspx


https://www.stepchange.org/


https://www.citizensadvice.org.uk/