F&F, Future Lending and Creditor Methodologies

VALHERU

Hi all,
I have been setting up a small business over the last few years. As a consequence my credit rating is dreadful.

I have two debts worth £9k combined and have been offered 42.5% off to F&F settle. Neither have been defaulted.

I am aware of how this will look on my credit report. Lowell have told me it will appear as settled under their new rules.

I realise the above is common but what I haven't seen commented on is how this partial payment will influence the behaviour of lenders I approach in the future.

I realise that my credit rating will improve slowly but I don't want to exclude myself from top tier lenders in the next six years either.

Can anyone comment on how lenders will be influenced by the presence of a partial settlement on my record. Will I be excluded from the best lender for the next six years? ...or does it not really make any difference?

[Deleted User]

First off you don't have a credit rating (or score) - you have a credit history.

Something that is fully settled will look better than something that is partially settled to future lenders and the affect will lessen as time goes on.

sourcrates

VALHERU wrote: »

I have two debts worth £9k combined and have been offered 42.5% off to F&F settle. Neither have been defaulted.

I am aware of how this will look on my credit report. Lowell have told me it will appear as settled under their new rules.

Hi,

Two questions, Lowell are buyers of bad debt, are you 100% sure they did not default ?

I am unaware of any "new rules" regarding the reporting of credit account information, did they elaborate at all ?

VALHERU

sourcrates wrote: »

Hi,

Two questions, Lowell are buyers of bad debt, are you 100% sure they did not default ?

I am unaware of any "new rules" regarding the reporting of credit account information, did they elaborate at all ?

Good questions...
I managed the debts through collections with Creation Finance. I didn't default either but but were in collections for quite a while. I definitely have not defaulted with Lowell. I've managed the accounts quite well with communication.

With regards to new rules, I think that may be an internal thing. Their initial offer letter said it would go down as a partial payment.

I'm still keen to know how it affects lender behaviour when assessing and whether I'd be cut off by decent lenders.

[Deleted User]

That’s commercially sensitive information that won’t be shared by lenders.

sourcrates

VALHERU wrote: »

I'm still keen to know how it affects lender behaviour when assessing and whether I'd be cut off by decent lenders.

It would depend on the individual companies own lending policy, obviously a partially settled debt may ring alarm bells for some lenders, but not for others, what you refer to as "decent lenders" may see you as too much of a risk, but your credit history is just one part of their lending decision making process, so no one can give a difinitive answer really, only speculation.

Thrugelmir

VALHERU wrote: »

I'm still keen to know how it affects lender behaviour when assessing and whether I'd be cut off by decent lenders.

Technically failure to adhere to contractual terms is regarded as a default. This paints an extremely negative picture in the context of a business. Not just to lenders but suppliers too. If trade accounts are ever applied for.

VALHERU

Thrugelmir wrote: »

Technically failure to adhere to contractual terms is regarded as a default. This paints an extremely negative picture in the context of a business. Not just to lenders but suppliers too. If trade accounts are ever applied for.

I don't think I'd ever be applying for any trade accounts or similar. The only things I'm worried about are car finance and mortgages.

It seems the advice here is to pay off the whole lot.