How badly will this affect my credit file?

RandyTBagge

Hi, noob here!

Brief background: For years I was irresponsible with credit and terrible at managing my repayments but after a CCJ and several collection agencies taking over I’ve finally taken charge and am seeing some success by using the debt snowball approach. Now, after working a second job during lockdown I actually have some extra cash to put toward clearing debt and I can probably even close a couple of accounts, which will be a huge step forward for me. 

My question is if I can negotiate a reduced settlement payment what kind of effect will it have on my credit report? Rebuilding that is one of my main goals, so I might be willing to take longer to fully pay off the full amount if it helps me out in the long run but, on the other hand, why pay more if I don’t actually need to? Any money saved can go on to other debts. One of my accounts I was considering making an offer on is quite old and no longer appears on my credit report. Am I right in thinking that a reduced settlement on this account will not have any impact at all if the debt doesn’t even show up? If that is the case I have nothing to lose by making an offer, surely?

Any advice is readily welcomed.  Being financially responsible is new territory for me so please let me know if I’ve misunderstood how this all works!

Thank you.

ThisnotThat

If the debt is not being reported then the settlement won't be reported either.

RandyTBagge

ThisnotThat said:

If the debt is not being reported then the settlement won't be reported either.

Thank you. And for a debt that is on my file? Would a reduced settlement be detrimental to my overall standing or would the closed account negate that?

[Deleted User]

If it's reported then yes, it's fairly logical that if you don't pay back your debt in full it looks worse than if you do. Why would a new lender want to give you money knowing there is a chance you won't pay them back (this is not a judgement, just a hypothetical)?

That said, once 6 years has gone from any initial default date, the file will no longer show it so likely only the lender (and their connected firms) who got less than full would know and likely blacklist you internally

RandyTBagge

Deleted_User said:

That said, once 6 years has gone from any initial default date, the file will no longer show it so likely only the lender (and their connected firms) who got less than full would know and likely blacklist you internally

Thank you. I knew that partially settled debt would generally not be viewed as well as fully settled, but it’s things like internal blacklisting, etc. that I had no knowledge of as was hoping to find out about. 

adamp87

If it’s that old it’s not reported, I think they have to back to court to enforce a CCJ, and it’s not always likely.

https://debtcamel.co.uk/do-you-have-ccjs/

might be worth doing some research before deciding any steps.

RandyTBagge

adamp87 said:

If it’s that old it’s not reported, I think they have to back to court to enforce a CCJ, and it’s not always likely.

might be worth doing some research before deciding any steps.

It’s not a CCJ and all my debts are being paid off, so it’s not likely to come to that either (I do have a CCJ on one of my debts but that’s not one of the ones I’m asking about here). I’m not trying to get out of paying my debts entirely, but if I can get away paying less without any negative consequences why wouldn’t I?

adamp87

RandyTBagge said:

adamp87 said:

If it’s that old it’s not reported, I think they have to back to court to enforce a CCJ, and it’s not always likely.

might be worth doing some research before deciding any steps.

It’s not a CCJ and all my debts are being paid off, so it’s not likely to come to that either (I do have a CCJ on one of my debts but that’s not one of the ones I’m asking about here). I’m not trying to get out of paying my debts entirely, but if I can get away paying less without any negative consequences why wouldn’t I?

Sorry I get you. Well you’ve two options.

1) Make settlement offers, more likely if they are old and been sold multiple times. If they are still with the original lender not advisable.

2) If they refuse offer £1 a month as it’s all you can afford and see the land in 12 months if they’ll accept an offer. 

3) if any of these haven’t been paid for years or acknowledged Providing all your address details are correct wait and see what happens. They won’t CcJ straight away but if you are close to say 6 years in that way it’ll become statute barred, probably better to go down that route & see if you can eliminate paying it all together 

overall the damage to your report is done already. If they’ve fell off it will have no effect whatsoever 

RandyTBagge

1) Make settlement offers, more likely if they are old and been sold multiple times. If they are still with the original lender not advisable.

2) If they refuse offer £1 a month as it’s all you can afford and see the land in 12 months if they’ll accept an offer. 

3) if any of these haven’t been paid for years or acknowledged Providing all your address details are correct wait and see what happens. They won’t CcJ straight away but if you are close to say 6 years in that way it’ll become statute barred, probably better to go down that route & see if you can eliminate paying it all together 

overall the damage to your report is done already. If they’ve fell off it will have no effect whatsoever 

That’s exactly what I wanted to know, thanks. I’ve been making regular payments on all my debts for a while now so I don’t think I could get away with any of them being statute barred. 

So it seems like the best option for me personally would be to put offers in on the debts that don’t show on my credit report and, assuming they’re accepted, attack the remainder that do show on the report by using the extra money I would have paid toward the settled accounts (on top of the payments I was already making). 

Thank you to all for for you help