Refunded bank charges/fees

DQ1241

Hi, 
I received a letter confirming Bank of Scotland did not take appropriate action in dealing with my account & I am due £1300 refund in overpaid charges/fees dating back to 2012/2015. At the time I was continually living in overdrafts with daily fees added putting me into financial hardship. I was advised to setup debt management scheme to to repay this. 
My recent mortgage application was refused due to this account showing on my file. This is the only default on my credit file. I have been advised this will be reported until May 2021. I can not move forward with any mortgage application until after this date. I am now financially stable however this account is holding me back. This account would have been paid and dropped off my credit report if it wasn’t for the additional fee/ charges added as it took me an extra year to repay this debt that I am now getting this refunded. Everything else was paid quickly & has dropped off my report. As this account was not handled correctly at the time, does anyone know if it would it be possible to get this to be removed from my credit file? Thanks 

[Deleted User]

You'll be able to move forward with your mortgage application before the account drops off.  It won't be removed from your files.

Use a decent broker to place your application accordingly. 

DQ1241

Thanks for your response. I was advised by a broker I could only apply to sub prime lender, I need a larger deposit & will pay higher interest charges. It would be better for me to wait until this account drops off. I might get a second opinion. Thanks 

[Deleted User]

A specialist low credit rating broker might get you a better deal yes, or you could wait and get a bigger deposit, look for a cheaper house or you could get a short deal and re-mortgage when the account drops off.

While the debt cycle of charges and defaults and more charges is unfortunate, it was, ultimately in the eyes of lenders, your fault for living beyond your means / not utilising the financial hardship help the banks should offer (that they don't offer to help by default is unfortunate). This is not a criticism or a personal attack, I sympathise with your circumstances, it can happen to anyone - 1/4 of Brits have virtually no savings, let alone the recommended 3 months wages and could be in such a cycle at the drop of a hat. This is just how the banks see it as they don't look at personal circumstances from 5 years ago e.g. if you lost your job or had to deal with a sick relative etc - it's a harsh world and they just deal with numbers. Banks have a duty to report the facts to the credit agencies so no, they won't (and indeed, shouldn't) remove it as for every person who has fallen on hard times, there will be 1 or more who seek to play the system and escape their debts through nefarious means and other lenders have no way to know which you are, hence they don't remove these (factually correct) defaults - at least it's only 8 months away for it to go and the refund can go to your deposit. Good luck with the applications