Defaults - Moving On.

I've been going through a lot of difficulties over the years - mental health; unstable home life (bouncing around with no stable gaffe at all) amongst other things. The end result being debt - a fair bit of it and me burying my head in the sand about it because quite frankly I could barely muster up the energy or the mental capacity to get out of bed, let alone have a back and forth with the likes of Lowell and Friends. I also have an old CCJ on the file for a parking ticket which I've been entirely unaware of until I saw it on there. Paid it off within a day of finding out so that's now 'satisfied'.

(Again that bouncing around sofas/sparerooms - I didn't get any correspondence). 

Nowadays I'm doing a lot better - life is actually stable and so is my mental health. 

Now I've a more regular income and can see a way forward, I'm reaching out to creditors to settle outstanding balances (and maybe even drop a default off or two). Transunion tells me that I have 18 defaults (other CRA's may well say different). Some are as old as 2018/2020 and a few are as recent as last year. 

Money wise, I should be in a position to buy within the next two years. (I'm fortunate to now have quite a good income and right now keeping expenses as low as possible so I can pay debt and save - calculations show both are possible). 

I wanted to know if defaults, despite being satisfied, would pose a problem if I were to need to take out a line of credit in the future* or better yet - shopping for a mortgage. I'm aware that I'm probably looking at a higher interest rate from a 'subprime' lender until the defaults and CCJ drop off entirely. I've heard that there are some guidelines that creditors should follow when it comes to defaults, particularly pertaining to mental health. I reached out to Lowell who came back with a big fat no and said the defaults were entered by the original creditors so not their problem, despite their name showing up on my file.  

Is there any way at all that I can get these defaults removed? I've heard that it is possible in exceptional circumstances (health etc). 

* - I'm not asking here for 'should you really be getting credit given the past?' - at some point, I'm going to have to be it replacing my motor or sticking something essential on a 'pay in three' or a c.c (if I can ever get one). It's up to me to decide that at the time. 

Comments

  • sourcrates
    sourcrates Posts: 28,526
    First Anniversary Name Dropper First Post Photogenic
    Ambassador
    edited 18 December 2023 at 6:57PM
    No, you cannot get a default removed under virtually any circumstances, it is a factual notice of an event, that your account went unpaid, the reason why it defaulted doesn't matter.

    There are certain situations whereby an individual having a mis-selling compliant upheld, can have the entire entry removed from their file as part of any redress awarded, but that mainly only applied to payday loans, due to there nature, but can apply to other borrowing, it depends on the circumstances.

    Some people have been successful in having debts written off due to mental health reasons, but not usually when they have a good income coming in.

    With that many defaults, and a satisfied CCJ on file, further lending will be impossible until they eventually drop off your credit file 6 years from the date of default/issue.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,224
    Name Dropper First Anniversary First Post Cashback Cashier
    Forumite
    Yes I agree with most of that. Your credit file has to be an accurate reflection of what actually happened.

    However, if you should never have been offered credit in the first place then the whole entry should be removed. Have a read of this

    https://debtcamel.co.uk/refunds-catalogue-credit-card/

  • Rob5342
    Rob5342 Posts: 1,349
    First Post First Anniversary Name Dropper
    Forumite
    edited 18 December 2023 at 7:07PM
    Prompted by that debt camel article, I won an unaffordable lending complaint against Nationwide, the result was a £16,000 interest refund plus all negative marks being removed from my credit report.

    It was a long hard fight taking two years in total and I had to fight them every step of the way taking it all the way to an FOS ombudsman. I had three other cases that I lost completely and two others where I got the defaults backdated.

    It all comes down to whether the lender made a reasonable decision given the information they had available to them. The ones I won were because they had given me multiple credit limit increases despite being able to see from my account that I was struggling. If it was reasonable for them to give you credit at the time and you got into trouble later then you are unlikely to win the complaint.
  • Given the fixed timelines for the defaults and now being much more settled, I'd suggest you don't rush to get a mortgage.

    Instead you can plan to minimise the chances of needing credit in the future. You mention your car or another essential item needed to be paid in three. These things are what savings are for. Pay for in advance not after the fact. Set targets for yourself. What you want as a deposit on a property, divide by 6 (for the years) and then divide by 12 for how much to set aside each month. Same for how much you think a replacement car would cost, divide that by how many years you estimate current one will last then again by 12 for the monthly figure. Holidays, white goods, central heating systems (when you are a homeowner) and anything else you can think of can be treated in the same way. 

    It is a bit like paying of credit, but to yourself not to anyone else, and interest can earn you money instead of costing you money. Sorry if I sound preaching, no one is more evangelical than a recent convert and this process has radically changed my finances. They are much healthier now and on the road to debt free.

    From my understanding because the debts are defaulted you can dictate how much you pay to each one each month, so there is room to put yourself first to pay.


Meet your Ambassadors

Categories

  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.9K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards