Virgin - no default after 6 months

Superhoopza

freshstart2023 said:

This is true and the charges/interest definitely rack up over such a period also 😭

Yes good point also. Every decision depends on personal circumstances but if people can afford to pay debt and lower balances, it seems this is the better option.

RAS

Superhoopza said:

This is really important when people advise DMPs, yes defaults clear after 6 years but if it takes up to a year in some cases to get a default, in reality you are looking at 7 years until you have good credit history. Yes there's lots of other factors in play but I rarely see this mentioned when DMP and default advice is given.

The other side is we see people heading straight into DMPs without defaults. So their credit record is wrecked for 6 years after they pay off the debt. 

In the old days, it wasn't unknown for people to make token payments of £1 for years and years on debt they had no way of ever paying off.

Superhoopza

RAS said:

Superhoopza said:

This is really important when people advise DMPs, yes defaults clear after 6 years but if it takes up to a year in some cases to get a default, in reality you are looking at 7 years until you have good credit history. Yes there's lots of other factors in play but I rarely see this mentioned when DMP and default advice is given.

The other side is we see people heading straight into DMPs without defaults. So their credit record is wrecked for 6 years after they pay off the debt. 

In the old days, it wasn't unknown for people to make token payments of £1 for years and years on debt they had no way of ever paying off.

I don't disagree with that at all, I'm saying though that it's rarely communicated that in reality it is longer than 6 years to repair the credit history and whilst settlement offers may happen in that time, interest and charges will also be added. My point is all of this should be said when advice is offered and I don't see these aspects mentioned much on here.

freshstart2023

I think it’s a really good point as I have two cards with Virgin and I am accruing £250 per month in interest and charges 

Rob5342

Superhoopza said:

This is really important when people advise DMPs, yes defaults clear after 6 years but if it takes up to a year in some cases to get a default, in reality you are looking at 7 years until you have good credit history. Yes there's lots of other factors in play but I rarely see this mentioned when DMP and default advice is given.

That's true, but generally speaking payment arrangements are likely to harm your credit report for much longer than defaults. There will be extra interest charges but they will be offset by being able to make a reduced settlement offer to a DCA

Superhoopza

Rob5342 said:

Superhoopza said:

This is really important when people advise DMPs, yes defaults clear after 6 years but if it takes up to a year in some cases to get a default, in reality you are looking at 7 years until you have good credit history. Yes there's lots of other factors in play but I rarely see this mentioned when DMP and default advice is given.

That's true, but generally speaking payment arrangements are likely to harm your credit report for much longer than defaults. There will be extra interest charges but they will be offset by being able to make a reduced settlement offer to a DCA

Agreed, sometimes a default is heavily suggested though when a large debt figure is quoted, even if it can be paid back by making monthly payments. If someone can't make payments then yes default is better than arrangements to pay.

fatbelly

It's a fairly recent development that lenders think they are being helpful by not applying defaults.

Guidance remains the same that they should do this after 3-6 missed payments

https://www.scoronline.co.uk/key-documents/