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Paying defaults - beneficial?

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Hey!

Have recently been discussing my partners financial life, she currently has ONE default on her credit file, dating back to 2017, of an amount of £359.78p.

She has been in contact with the lender, and has come to an agreement with them that if the account is settled in full, the lender will remove the default from the account completely, this is also written confirmation from the lender via email.

My question is, if she pays it off, and they don’t remove the default for whatever reason, will her credit go up in terms of history and score?

Or would it go up more if the default is removed after settling in full? Possibly a self explanatory question, but wanted a second opinion, maybe a 7th or 8th opinion lol!
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Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    If she settles it, her credit files would improve, her score would drop.

    If the default is removed, her history would look even better. Her score would be divided by three, plus twenty added points.
  • Awesome! Is that how scores are generated? Divided by 3 + 20?
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Only for default removal.

    CCJ removal is 25% plus your age, less the number of batteries you've thrown away in the last 12 months.
  • Oh so you was being sarcastic lol
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Indeed so. Your credit score isn't a real indicator, or used by lenders. It can be whatever you want it to be.

    Lenders will look only at your credit files and base their decisions on those.
  • As repeatedly told on your other threads the score is meaningless.
    As is the rating.
  • Okay, so back to the original questions, will it be best to settle in full with the default removed?
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    See post 2.

    Settling the debt will look better to other lenders.

    If the default is also removed, her files will look better still.
  • Credit scores are relevant to a certain degree. I have 8 defaults and my score is very poor 1/5

    Before I went on a payment plan and got the defaults it was good 4/5.

    If the score meant absolutely nothing then why didn't my score go up to very good 5/5 when they applied the defaults, which everybody knows are bad for lenders to see on your credit history

    So like I said, it means something if only to a slight degree and you should really stop telling people they are completely meaningless
  • I’d also agree to the ‘relevancy’ they definitely reflect your credit history in the score.

    But a lender doesn’t see your credit score , I mean a history of bad payments over the period of 2011/2015 for myself meant my score dropped to a measly 8 on Experian, now everything is paid off and all my monthly’s are up to date and paid in full each month, I have a score of 750, so yes absolutely relevant in terms of tracking if your doing well with payments etc , but not relevant to a lenders point of view.
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