partial settlements/ credit file
magicman62
Posts: 78 Forumite
I have asked my creditors for settlement figures as I am in a position to clear my debts ..1 of all my credits has advised me that a agreed settlement payment will show on my credit file as a partial payment .Could someone please advise what this means and will it restrict my efforts to rebuild my credit rating ...
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Comments
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It will show you have partially settled your debts.
A full settlement would be marginally better, but settling it is the key thing.0 -
Hi magicman62
A partial settlement means future creditors can see you paid an agreed amount, but it was less than the full balance owing. It's worth bearing in mind if a default has already been registered on the debt, it's going to be removed from your credit file 6 years after the date of default. That's regardless of whether you fully or partially settle the debt.
If there is no default, the debt will be removed 6 years after the date the account is closed.
If the debt is going to be removed from your credit file in the not too distant future you may decide how the debt is marked is not going to be that significant. Also bear in mind if a debt is settled that's one less obligation to meet if you are considering applying for credit in the future.
Susie
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
Thank you Susie, the debts will take another 10 years to pay off on my DMP by taking a settlement I will save £2500 money I can certainly use now ..If I have the partial settlement markers on my credit files will I be able to rebuild my credit rating or will they hinder me in getting any credit between now and 6 years time I have read that it may only affect large purchases ie mortgages and car finance .. ...PS i retire in 4 years time and at the moment I am unemployed ...0
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Have these debts defaulted? What date shows on your credit files?
Partially satisfied means you've not been able to pay the full debt off and could look worse than fully satisfied. However if you will not pay it off for 10 years then a partially satisfied settled debt looks better than as outstanding debt.
If you are retiring in 4 years time, then you income stream may affect what credit you can get.0 -
Partial settlement registration on your file is to advise potential creditors that you were in debt with the company but has negotiated a partial settlement in fulfillment of the entire debt. This is a 50/50 information, some lenders may accept you as someone who has settled their debt, others may consider you risky. 6 years statute barred is the only option to remove this from your file0
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magicman62 wrote: »Thank you Susie, the debts will take another 10 years to pay off on my DMP by taking a settlement I will save £2500 money I can certainly use now ..If I have the partial settlement markers on my credit files will I be able to rebuild my credit rating or will they hinder me in getting any credit between now and 6 years time I have read that it may only affect large purchases ie mortgages and car finance .. ...PS i retire in 4 years time and at the moment I am unemployed ...
Hi again magicman62
The first thing to check is if defaults have been registered for your debts, and if so when. If the debts are soon to be removed from your credit file because the defaults are approaching 6 years old, how the debt is settled will have little bearing.
Every creditor will have their own system to score you, but generally a fully settled debt looks better than a partially settled one. Given the alternative is to have a DMP for the next 10 years a partial settlement could be a better option. You won't be able to afford to take out further credit while you are paying a DMP.
You haven't mentioned where the funds are coming for but you do mention you are due to retire in a few years. If you were considering accessing a private pension pot to fund this it's important to get some pension advice first. You can get free advice from the Pensions Advisory Service on 0300 123 1047.
Susie
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
Hi Susie the funds have come from equity release ,which was carefully researched and with the full agreement of my family. I withdrew just enough funds to pay my mortgage and debts so i could plan better for my rertirement and be debt free otherwise I would have to work till i was 70 .......0
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