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Settling a debt in full, effect on credit file?
KeepingOn
Posts: 2 Newbie
Hi everyone, I’m new here and hope this is in the correct place. I was recommended to post over here from another forum as the advice is so helpful.
So, I am desperately trying to repair my credit file in the hope of gaining a mortgage in future. I have 3 defaults showing on my credit file. One from barclaycard that was set to zero when they passed the debt to hoist, so another for them for around £600 pound from 2015. I then set up a payment plan with them which ended up with Robinson way and paid it each month, I cleared the balance in full at the end of December 2018. The account on my credit file has continued to show as ‘default’ each month and the balance has still not set to zero.
The other debt is with Cabot for £1400 from 2015, which is again being paid up with Robinson way, that also shows a default each month. I can now (just) find the money to clear that in full too but I’m wondering if doing so will help my credit file at all. They occasionally offer me a reduced amount for full and final settlement but if paying in full would make a big difference to my file I’d rather do that. Any advice would be great. Thanks.
So, I am desperately trying to repair my credit file in the hope of gaining a mortgage in future. I have 3 defaults showing on my credit file. One from barclaycard that was set to zero when they passed the debt to hoist, so another for them for around £600 pound from 2015. I then set up a payment plan with them which ended up with Robinson way and paid it each month, I cleared the balance in full at the end of December 2018. The account on my credit file has continued to show as ‘default’ each month and the balance has still not set to zero.
The other debt is with Cabot for £1400 from 2015, which is again being paid up with Robinson way, that also shows a default each month. I can now (just) find the money to clear that in full too but I’m wondering if doing so will help my credit file at all. They occasionally offer me a reduced amount for full and final settlement but if paying in full would make a big difference to my file I’d rather do that. Any advice would be great. Thanks.
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Comments
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Hi,
The defaults will stay on your credit file for 6 years regardless of what you do.
If you pay in full, it should then show a default with a zero balance, if partially settled, it will show as default with the balance remaining, although you will not be liable for this as long as you have a written settlement agreement to that effect.
Six years from default date the whole lot will drop off your file and no one will be any the wiser as too how you settled your debts.
In your shoes i would make a low offer to settle and negotiate from there.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
Thank you for your reply.
Is it likely I would have any chance of obtaining a mortgage this year with a default on my file? If so would it look any better or worse for me if I paid in full vs settling the debt for a lower amount? It’s not due to fall off my credit file until the end of 2020.0
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