Defaults on credit file during pandemic

probst1701

Hi,  I have three defaults on my credit file.  All of them were in Feb 2021 during the pandemic when I started a debt management plan, the plan was fully paid off last year.  Of the three defaults, two were in good standing throughout their existance and only went into "1 month late", "2 months late" etc in the last couple of months before I started the DMP when I just couldnt even keep up minimum payments.  The third shows it's been in bad standing throughout it's existance but thats due to it being sold to a credit agency.  

My question is, I have two years left until these "fall off" I wondered if anyone had had success getting defaults removed early due to defaults during covid? 

MattMattMattUK

probst1701 said:

Hi,  I have three defaults on my credit file.  All of them were in Feb 2021 during the pandemic when I started a debt management plan, the plan was fully paid off last year.  Of the three defaults, two were in good standing throughout their existance and only went into "1 month late", "2 months late" etc in the last couple of months before I started the DMP when I just couldnt even keep up minimum payments.  The third shows it's been in bad standing throughout it's existance but thats due to it being sold to a credit agency.  

My question is, I have two years left until these "fall off" I wondered if anyone had had success getting defaults removed early due to defaults during covid? 

Almost certainly someone has, but it will have been rare. They are a factual report of what happened, not a judgement on you as a person. 

The fact that they are from 2021 means they also have a vastly diminished impact on lender's assessments of you. Whilst they are not ideal they are what they are are four years old and paid off so their impact will not be huge. 

probst1701

I still get autorejected for almost everything I apply for, even non debt things like phone contracts, and my credit score has never gone over 500 despite a decent income and only a couple of outgoings.  Car fully paid off in Sept, credit card paid more than minimum each month, any other direct debits paid on time etc.  I could only assume the defaults are what was keeping the score down.

TheSpectator

Your score is meaningless.

You say credit card more than minimum - so you are not clearing it in full every month and paying interest?

Hoenir

Not the score that matters. Your past 6 years of data will interogated to see if it meets the underwriting criteria set by the company that you applied for credit from. If you don't clear all the hurdles then you'll be rejected. In the main the process is fully automated. Nothing personal. Just business. 

CliveOfIndia

Your score is irrelevant since it's not even seen by a lender.

Defaults will of course have an impact, though as noted by the previous poster, the impact diminishes over time.

probst1701 said:

credit card paid more than minimum each month

This may have some bearing.  Although it's only a minor "black mark" in the grand scheme of things, carrying a balance from month to month is not ideal (unless you're on a 0% promotion).  If you're able to clear it in full every month, this will go some way towards helping.

Other than that, check all 3 of your credit reports to make sure there's no other adverse markers which you may not be aware of.

probst1701 said:

I still get autorejected for almost everything I apply for, even non debt things like phone contracts

Most normal phone contracts are in fact a form of credit.  Have you been applying for a fair few credit products in a short space of time?  If so, that could well be the issue - lots of hard searches close together are generally viewed fairly negatively by most lenders.

probst1701

TheSpectator said:

Your score is meaningless.

You say credit card more than minimum - so you are not clearing it in full every month and paying interest?

I'm in a 6 month 0% interest at the moment, it'll be cleared before that kicks in. 

MattMattMattUK

probst1701 said:

I still get autorejected for almost everything I apply for, even non debt things like phone contracts, and my credit score has never gone over 500 despite a decent income and only a couple of outgoings.  

Your credit score is entirely meaningless, no lender ever sees it, it is just made up by the CRA for marketing purposes. 

probst1701 said:

Car fully paid off in Sept, credit card paid more than minimum each month, any other direct debits paid on time etc.  I could only assume the defaults are what was keeping the score down.

It could be affordability, it could be that some systems just automatically reject people with any kind of default at all. Phone contracts where they include a phone are actually seen as quite high risk, SIM only far less so. Not paying the card in full every month is equally seen as quite a large risk factor. Do you have a mortgage?

probst1701

CliveOfIndia said:

Your score is irrelevant since it's not even seen by a lender.

Defaults will of course have an impact, though as noted by the previous poster, the impact diminishes over time.

probst1701 said:

credit card paid more than minimum each month

This may have some bearing.  Although it's only a minor "black mark" in the grand scheme of things, carrying a balance from month to month is not ideal (unless you're on a 0% promotion).  If you're able to clear it in full every month, this will go some way towards helping.

Other than that, check all 3 of your credit reports to make sure there's no other adverse markers which you may not be aware of.

probst1701 said:

I still get autorejected for almost everything I apply for, even non debt things like phone contracts

Most normal phone contracts are in fact a form of credit.  Have you been applying for a fair few credit products in a short space of time?  If so, that could well be the issue - lots of hard searches close together are generally viewed fairly negatively by most lenders.

Yes, I'm still in 0% promotion of the credit card so no interest, i'm doing £150 a month, minimum is 33.33 this month, it'll be cleared before any interest kicks in. 

And no, according to experian there have been a LOT of searches in October/November when I was changing car insurance but all but one says "wont impact your credit score" next to it, there have been 3 total in the last 12 months that say "may impact your credit score"

ManyWays

 Car fully paid off in Sept
was this HP? or a bank loan? 

Brie

So as someone has pointed out a phone contract is in fact a debt in that it's a credit agreement.  You are given a phone and the use of it by taking out what is effectively a loan.  

The same applies to car and home insurance.  More credit agreements. Shopping around can add a lot of searches to your record.

Do you have an overdraft? Do you have any credit cards that have high limits on them?  Even if you are not using the credit it makes you a bigger risk to a bank/creditor.

Moved a lot and not registered to vote?  Makes you look unstable and too much of a risk.

So make sure you're registered (even if you don't intend to vote) and cut down your amount of used and available credit.  And wait.