Is partially paid/settled good or bad for credit score.

stacyjbyrne

Hi I have about 4defaults on my credit file stupidly from Catalogue accounts. The defaults are from 3years ago now and I’m tempted to just wait out the next 3 years for them to be removed from my credit file but I’m wondering if I just pay them off with the discount they’ve offered me what affect does that have on my credit file? Holding to start to repair it and I’m thinking it may take upto a year to pay off my debt but I’m thinking if it’s paid off atleast my credit can then start to repair itself

[Deleted User]

Settled is far better than leaving it unsettled.

But four defaults is a lot.

stacyjbyrne

I think they were all under a certain amount? Does that make any difference?

[Deleted User]

Not really. 

jones_guitar

Hi Stacy, what discounts did they offer? I settled one at 25percent (had 5). 4 remain. I am in the same position, and I will only settle if they come down enough for me. I think it does improve credit rating obly slightly, but it isn't the only factor. I do not see how my credit rating will recover completely until they drop off. It also depends if you plan to get more credit? I assume after 6years the dept has little value to sell on.

John_

If lenders can see that you did not repay what you had agreed to then they will of course view it as a negative. Any reason for you not to keep paying until it’s cleared?

stacyjbyrne

John_ said:

If lenders can see that you did not repay what you had agreed to then they will of course view it as a negative. Any reason for you not to keep paying until it’s cleared?

I would’ve just waited three years for them to drop off and not pay anything. But I would like to get a mortgage within the next three years so was hoping to just settle the discounted payments then get saving my deposit for a mortgage 

D3xt3r5L4b

stacyjbyrne said:

John_ said:

If lenders can see that you did not repay what you had agreed to then they will of course view it as a negative. Any reason for you not to keep paying until it’s cleared?

I would’ve just waited three years for them to drop off and not pay anything. But I would like to get a mortgage within the next three years so was hoping to just settle the discounted payments then get saving my deposit for a mortgage 

They could still apply for a CCJ within those 3 years though. 

stacyjbyrne

jones_guitar said:

Hi Stacy, what discounts did they offer? I settled one at 25percent (had 5). 4 remain. I am in the same position, and I will only settle if they come down enough for me. I think it does improve credit rating obly slightly, but it isn't the only factor. I do not see how my credit rating will recover completely until they drop off. It also depends if you plan to get more credit? I assume after 6years the dept has little value to sell on.

I’m sure its 40% they have offered

ImThatGuy

You ran up the debt so surely the decent human being thing to do is pay off what you owe in full? 

sourcrates

stacyjbyrne said:

Hi I have about 4defaults on my credit file stupidly from Catalogue accounts. The defaults are from 3years ago now and I’m tempted to just wait out the next 3 years for them to be removed from my credit file but I’m wondering if I just pay them off with the discount they’ve offered me what affect does that have on my credit file? Holding to start to repair it and I’m thinking it may take upto a year to pay off my debt but I’m thinking if it’s paid off atleast my credit can then start to repair itself

Paying off defaulted accounts will make no difference to your credit file whatsoever.

Its the actual default that causes the problem, paying the default does not remove it, however, the older the defaults are, the less affect they will have where credit decisions are concerned, but that effect will still be minimal.

The creditor could still chase you through the courts, you need to keep that thought foremost in your mind, also the question must be asked, if you couldn`t keep up with catalogue repayments, how on earth do you expect to keep up payments on a mortgage ?