How long before a default starts to have less of an effect?

neo1607 · 18 April 2019 at 1:12PM

Long story short I asked Step change for a bit of help back in 2016 / 2017 and they gave me some really bad advice to go into a debt management plan and let all my loans default so I could pay the minimum

Looking back I should really have ignored that advice as I was coping alright-ish at the time... Anyway thanks to that advice I ended up with 5 or 6 defaults on my credit rating. All of them are dated early 2017 and they are all now settled apart from 1 unsecured car loan which is nearly paid off.

How long before these default markers start to have less of an effect on my credit rating as my rating has been perfect since around mid 2017, haven't missed a single payment on anything. Or do I just have to wait out the full 6 years.

How hard is it to get a default removed? I don't suppose I can try and plead with the company's Involved that it was due to bad advise from Step change that I let them default or will they not care even though they are all settled?

[Deleted User] · 18 April 2019 at 1:15PM

A default has less impact with every month that passes.

The specifics depends on the lender you are approaching and the product you're applying for. 6 defaults, only two years ago, won't be sending great signals.

You won't get them removed for choosing to default.

Willing2Learn · 18 April 2019 at 1:24PM

neo1607 wrote: »

How hard is it to get a default removed? I don't suppose I can try and plead with the company's Involved that it was due to bad advise from Step change that I let them default or will they not care even though they are all settled?

You cannot get the defaults removed, as it seems from what you have said, that you broke the terms of the original credit agreements when you entered into a DMP.

Just wondering. When you said that StepChange gave you bad advice. At the time when you first contacted StepChange, were you able to maintain your contractually required payments to each of your creditors?

[Deleted User] · 18 April 2019 at 1:46PM

They gave the correct advise and you chose to abide by it - so it's not really their fault here.

Defaults will have less of an impact as time goes on, however don't get fixated on the score or rating as it will likely drop anyway when the defaulted account gets removed from your files

neo1607 · 18 April 2019 at 1:53PM

To be honest I can't actually remember the reason I contacted them in the first place as I was managing alright with all my accounts at the time but I do remember them being really strict with filling out budget sheets and they somehow kept calculating that I was spending more a month than I actually earned which wasn't the case

Then as luck would have it less than a month after everything defaulted I got a new job that went from 12k a year to £23k a year.

One of life's lessons though, they will eventually start to fade from my record. The only thing that worry's me is applying for my mortgage this year although the mortgage advisor that I spoke to last year said there are several providers that are happy to support people who have debits more than 2 year old. Then I suppose I just wait another 3 / 4 years till the defaults are removed and I can remortgage at a much better rate

neo1607 · 18 April 2019 at 2:15PM

Also I know this is a completely separate question but the one outstanding default I have is an unsecured loan from a few years ago. Basically since that defaulted it was passed to a debt recovery company. They took a couple of payments then stopped, then it was sold to another company. They took 1 payment then stopped from their end, didn't hear anything off them for 6 months or so. Then a new company took it over and the same again 1 payment then they never contacted me until I phoned them up, they said it was a computer error on their behalf and they set it back up, so I've paid about 3 months worth

Since it defaulted anyway and this could have been paid off so long ago had the debt companies not kept having problems on their side. Does a default matter on credit file if it's partially satisfied or fully satisfied. They are offering me a settlement of about 1/4 of the original debt which I'm tempted to take if it's not gonna affect my file much more

[Deleted User] · 18 April 2019 at 2:25PM

Take the settlement. You just want to get these settled now.

neo1607 · 18 April 2019 at 2:28PM

Deleted_User wrote: »

Take the settlement. You just want to get these settled now.

I've just phoned them up, the outstanding is £4000ish, they are only willing to knock £400 off that total as early settlement. Which is ridiculous considering they are about the 4th company now that this has been sold to so they have bought it for Penny's anyway and back when they first reached out to me they only wanted about £1500 to settle it, but I wasn't in a situation where I had that money sitting whereas I do now.

Is there anything I can try to get this figure lower 🤔

[Deleted User] · 18 April 2019 at 2:32PM

Why is it ridiculous?
You owe the money so you should pay it back.
£400 off is 10% which is fair and reasonable.

Willing2Learn · 18 April 2019 at 2:32PM

If you can make a realistic counter offer then do so.

Otherwise you will need to set up a payment plan...

neo1607 · 18 April 2019 at 2:34PM

!!! wrote: »

Why is it ridiculous?
You owe the money so you should pay it back.
£400 off is 10% which is fair and reasonable.

I meant ridiculous that they offer me 75% off about 8 months ago and now they only offer 10%

Also this debt is showing as £0 owing on my credit file with the original lender and the debt company is not showing anywhere on my file. Does that mean the original lender has just wrote it off and I'm paying this debt company money for nothing since they probably bought the account for Penny's anyway?

I'm not trying to argue about not paying it. I know I owe it. I'm just seeing if there's a "money saving" way around it

How long before a default starts to have less of an effect?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free