How loan repayments are reported to credit agency

rachelheels

Hi, I’d really appreciate any help

a few years ago I foolishly took out a provident loan

even more foolishly I didn’t repay it.

on my credit file it shows that I have a loan with them that’s 1 month in arrears each month for the last 5 years.

When it gets to year 6, will it all just drop off my credit file? Or will it keep rolling each month as technically it’s still open and no default notice issued (so far?)

thanks

[Deleted User]

If there's no default, it'll continue indefinitely, so you want to ask them to default it.

Bear in mind that if they choose to go for a CCJ, it will be on your files for a further 6 years.

rachelheels

Thanks,  I thought that would be the case

im going to offer a repayment plan so it hopefully won’t get to that stage 

Fighter1986

One option you have is that you raise a formal complaint to them disputing the data they reported to your credit file.

In this, I would state that you consider it reasonable that they mark the account as having defaulted three months after the last payment was recieved from you. Experian defines a default as:

"A default occurs if the lender decides to close your account because you’ve missed payments. This might happen to an account you have with a bank, mobile phone company or utility supplier (e.g. gas, electric and water).

A default can occur regardless of how much money you owe, whether it’s a few pounds or a few thousand. It usually happens if you’ve been missing payments over the course of three to six months"

On this basis, you consider it reasonable that the account be marked with a default date within three months, and no later than six months, of when you last made payment towards the account, in line with Experian guidelines.

You can explain that should this defualt date not be retrospectively added to your credit file against the account, you will escalate the matter to the ICO and FOS, for the reporting of the account being in breach of Experian's guidelines. 

That way, the account will disappear from your credit history much sooner than if left as it is.

As it is, the account will remain on your credit file, displaying all your past arrears in all their glory, for six years from the date you finish paying off the account, rather than just 12-18 months from now. 

rachelheels

Ooo that’s a good idea

if I did that and paid in full straight away after receiving the default, could I in theory then go back to them and say the default wasn’t issued correctly and should be removed from my credit file?

[Deleted User]

No. You ask them to apply the default correctly in the first place - not incorrectly and then correct it.

You want the default to show for the correct period. 

rachelheels

Ok, thanks guys I’m going to get the ball rolling, it’ll mean a default which I don’t want obviously but if it clears quicker then that’s probably best 

rachelheels

Letter sent, hopefully they’ll do as requested