Default on credit file causing problems

clanger66

Hi , my partner has credit cards debts that were sold to a debt collecting agency due to him not making regular payments (I think debt collecting agency is the correct term, the company is Arrow or Intrum as they were previously called.) Because he was working away it took a while for him to set up a payment plan with them but he has paid regularly by standing order for many months now. However when he looked at his credit file on Equifax this debt with Arrow/Intrum was showing as in default for the last few months including this current month. He rang Arrow/Intrum to ask them about this but they said it was nothing to do with them and he would need to speak to Virgin Money who the original debt was with they also said it would show as a default because he had defaulted with Virgin on the original debt. Can anyone tell me please if this is this correct? This is potentially going to have a big impact on our lives as we are trying to get a mortgage.

[Deleted User]

The default will show monthly until settled.

However, the account will drop off 6 years from date of first default, settled or not.

Thrugelmir

clanger66 wrote: »

This is potentially going to have a big impact on our lives as we are trying to get a mortgage.

Then tackle the debt owed! Decide what the priorities in your life are. Mortgage lenders can only base their decisions on what they see on credit files. They'll have no time for excuses and justification.

clanger66

Hi Thank you for replies. Yes we are tackling it as much as we can at the moment, we weren't intending to make excuses to the mortgage companies.

I already have a mortgage and needed to remortgage to buy out my ex's share of the house. My credit rating has been fairly good I have always paid on time but because I don't work I cannot get any more money on my own, I am disabled due to ill chronic ill health and wont get better. Divorce and ill health can happen to anyone. My partner is retraining to get a better job and working very long hours. We don't have any way of increasing our income at the moment and live very frugally. We had hoped to wait until my partner was qualified to get a mortgage but circumstances beyond our control have meant we have had to look at this now. Presumably the debt would still show for 6 years even if it was paid off ? We are just not in a position to do this at present in a lump sum unfortunately.

PixelPound

This stems from a common misconception - you have an agreement with Arrow which you are keeping to, so think your account shouldn't be in default.

The account was sefaulted by the original creditor, and as such will remain so. Your agreement with Arrow is to pay the defaulted debt - they should be updating the CRA and it should show current well as defaulted balance, once paid off it will be marked as settled. Just because you are paying doesn't stop it being defaulted.

Are you aiming to get a mortgage once all your debts have been paid? Otherwise you are asking a company to give you a very large sum to which they expect regular payments to, when you have shown unable to and still not cleared those debts.

PixelPound

Debt will show 6 years from the defaulted date and not the settlement date. If you need a remortgage, you would need a broker because you will need a lender willing to work with an outstanding debt, especially if you cannot clear it as part of the mortgage deal.

clanger66

Hi thank you, that is helpful. Yes we have approached a broker that deals with bad credit as my current lender would not consider it. Would it be better to try and include the debt in the mortgage deal? The debt is around 12k so probably won't make an enormous difference to the repayments I wouldn't think.

PixelPound

Approach more than one broker, just because one claims to deal in adverse credit, does nt mean they will get you the best deal. The general advice is usually not to exchanged unsecured debt into secured debt, but that's the type of question the broker can answer