What does a Neutral statues or flag mean on your credit file

Da7thSon

Hi all, I'm almost at the end of my car PCP, and given the value of the vehicle it makes more sense just to hand it back rather than part-ex it.

Ive had a chat with VW finance, and while my PCP ends in March next year, they have said that as I am over  50% of the settlement, then i can hand the car back now any time now without penalty but this would have a Neutral status added to my credit file. OR i can wait until March and hand it back then, and it would show as a positive status.

What does this Neutral status adding to a credit file actually mean in real terms? Is this a bad thing, and would it affect me long-term? Also, if it is a bad thing, even though it's called neutral, how long does it take to clear off my credit file?

Thanks

marcia_

Da7thSon said:

Hi all, I'm almost at the end of my car PCP, and given the value of the vehicle it makes more sense just to hand it back rather than part-ex it.

Ive had a chat with VW finance, and while my PCP ends in March next year, they have said that as I am over  50% of the settlement, then i can hand the car back now any time now without penalty but this would have a Neutral status added to my credit file. OR i can wait until March and hand it back then, and it would show as a positive status.

What does this Neutral status adding to a credit file actually mean in real terms? Is this a bad thing, and would it affect me long-term? Also, if it is a bad thing, even though it's called neutral, how long does it take to clear off my credit file?

Thanks

 Never heard of a neutral flag. Never seen flags just factual info as in no missed payments, account closed etc 

Brie

Likewise never heard of this.  So what's the benefit to you otherwise of handing it back early?  Can you do without a car for 6 months?

Da7thSon

The next car i get would be cheaper to insure, run and the monthly repayments would be less. So, handing it back 5 months early would save me money.