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

Kiwistrawb1990

Pay them off in full. I have a historic 4 year old default for Very (direct debit didn't transfer when I moved banks, I didn't think to check, letters sent to mums address while I was at uni - my fault) and as soon as I realised I paid it off in full and it was settled just a few months after being placed on my credit file.

Because of this, my mortgage broker doesn't think I'll have too many issues with getting a mortgage. If you don't pay them off in full, how can a lender be sure you'll pay them? 

adamp87

The damage has already been done with the default, regardless if you pay them in full or
not now. That’s really irrespective considering the timeframe. As each year goes by your credit file is better & the weight of those defaults gets smaller.

I’d advise in the meantime keeping your file clean & paying any credit you have on time.

They are offering a discount, so if you are paying them I wouldn’t at all be paying them in full, make full & final settlement offers that maybe are even more discounted - ensuring they close the account & don’t chase you further. There are some good templates online for this.

williamstewart

Why do they offer to accept say £1000 instead of the £1500 owed and then mark it as "partially settled"?
Surely if they're coming to you and saying they're happy to accept £xxx, then the matter should be done and dusted.  You've paid exactly what they asked for, so why should it be treated as if you haven't paid it all?
  

[Deleted User]

It's being treated as partially settled as that's what it is.

Once defaulted, it's effectively impossible to repay the full contractual amount.

John_

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 

But, again, why not pay them off? You probably shouldn’t be looking to borrow more money before you’ve paid back what you borrowed last time.

D3xt3r5L4b

ImThatGuy said:

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

Good luck with that. Everyone seems to post on here looking for a loophole or get out of dodge card.

The latest one is blaming COVID for not being able to make ends meet despite people still working and earning money. 

NatalieAGC

If it helps. I have 1 default on my file from 5 years ago. Nothing else just this one default. I also thought don’t pay it it will drop off soon.however I want another mortgage and paid of is much better than partial paid.  I contacted them to settle and they offered partial offer for F&F £560 offer from £800 default, and I decided to pay the full amount.  I’m also looking to get mortgage and it looks much better having it paid in full.  Albeit partial / settled or unpaid makes no difference to credit score as the default is the damage for 6 years.