Credit scores post defaults

billybuffett

Just thought i'd post this for info, if there's anyone else in a similar situation wondering what will happen to their credit score when defaults are removed;

Quick back story, 7-8 years ago I had numerous credit cards with large balances that eventually I couldn't afford to pay even the min payments on. Long story short, I defaulted on said credit cards, which then resulted in roughly 8 defaults on my credit report for cards plus an overdraft, a utility bill & a mobile phone bill, not proud.

Fast forward to last week & the last of my defaults finally dropped off my credit report. Even though I now know that credit scores are complete @~?!$, I was curious to see what would  happened to them when said default disappeared. 

With the one default left on my report, experian score was 663, with the default gone.....985 ! Transunion with default 533, default gone.....603 ! Both rated excellent ! Couldn't be bothered to check equifax as I couldn't find a free way to check.

Shame the scores are completely meaningless but at least I now have a clear report with no negative markers, just have to keep it that way !

MrFrugalFever

When a lender checks your file and discovers defaults it is an immediate red flag to them, hence the low 'score' provided by the credit brokers (not lenders).

When a lender checks your file and discovers perfect payment streaks and no negative history then they are likely to entertain lending. With that in mind, you become a more attractive individual to lend to and therefore this is reflected in a higher 'score'.

Your 'score' may be nice and high with credit brokers but you could still be declined by numerous lenders - especially those you defaulted with.

Clearscore (free) will display your Equifax details.

stewartwilliams

I had a CCJ that dropped off last November.
One default left that I'm paying back (low 4 figures) - going to overpay a bit more on that next year to clear it even though only a year left before that hits the 6 year point.

Applied for a Capital One credit card in the January after and was accepted with a £200 limit.  Easy to manage and got an increase to £800 offered 6 months later.
Applied for a mobile phone contract last month with O2 and accepted straightaway for that. Moved from PAYG with EE.
(Did try Aqua or some other sub-prime card prior to the CCJ dropping off, and rejected via their pre-check)

Making sure both are handled well, with all payments on time.

I did look at the Transunion credit score for my Lloyds account and that's showing as 542 (needs work) out of 710.
Glancing at borrowing options from the bank in their app, it's either "no chance" or "provide more information" even though I've been with them since the 90s.  No intention of getting an overdraft, and no requirements for a loan or mortgage at this point in time anyway.