Defaulted Credit Card - how bad is a partial repayment for credit rating?

Puzzledbyadream · 17 May 2018 at 9:41PM

I have a card which is in default and has been for a year. I am currently paying a small amount each month but saving up to pay the amount in full, but am struggling to save up the last few hundred pounds. Considering that I may wish to apply for a mortgage in the next 5 years, how risky is it to agree a partial repayment with the debt collection company? I can't seem to work out if I'm better doing it that way or waiting until I have a bit more money (probably October) and paying the card off in full. I know it'll take 6 years for it go off my record, but how much better would it look to pay it in full?

[Deleted User] · 17 May 2018 at 9:47PM

Once you've defaulted, any settlement will look better.

You may as well take any offer they give you, as long as you get it in writing that they will not pursue you for the remainder.

binaryuniverse · 17 May 2018 at 9:48PM

Any kind of default, fully settled or otherwise, on your file is going to give a mortgage lender the jitters. You'd better off waiting until it has dropped from your file before applying.

Personally, I'd go with what is going to save you the most money.

T-G-C · 17 May 2018 at 11:35PM

It won't increase your creditworthiness either way, but will demonstrate to lenders that responsibility was taken to sort out the mess accumulated from bad financial decisions.

In this industry, time does heal and provided the debt is cleared, after some time, the harsh effect will fade, even before it falls off. You won't be getting the top mainstream offers anytime soon, but one step at a time is the right attitude to have on this.

Good luck with everything

Defaulted Credit Card - how bad is a partial repayment for credit rating?

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