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  • FIRST POST
    • BristolMan
    • By BristolMan 7th Mar 18, 5:20 PM
    • 15Posts
    • 2Thanks
    BristolMan
    Default vs Closed, Partially Settled
    • #1
    • 7th Mar 18, 5:20 PM
    Default vs Closed, Partially Settled 7th Mar 18 at 5:20 PM
    Hi everyone,

    Which is worse on a credit file:

    Default
    or
    Closed, partially settled
Page 1
    • glentoran99
    • By glentoran99 7th Mar 18, 5:20 PM
    • 5,248 Posts
    • 4,444 Thanks
    glentoran99
    • #2
    • 7th Mar 18, 5:20 PM
    • #2
    • 7th Mar 18, 5:20 PM
    a paid default is better than an unpaid one
  • National Debtline
    • #3
    • 7th Mar 18, 5:27 PM
    • #3
    • 7th Mar 18, 5:27 PM
    Hi BristolMan


    I will just add a few points. A partial settlement will show future creditors that you paid an agreed amount but it was less than the total owing. That's not quite as favourable as a debt being fully satisfied.


    A default will show future creditors that you fell into arrears on the debt.


    You could have a default and then partially satisfy the debt, in which case the debt drops off your credit file 6 years after the date of the default. But if there is no default and you partially settle the debt, the debt drops off 6 years after the date of the partial settlement.


    Susie
    @natdebtline
    We 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 Steps
    • BristolMan
    • By BristolMan 7th Mar 18, 6:23 PM
    • 15 Posts
    • 2 Thanks
    BristolMan
    • #4
    • 7th Mar 18, 6:23 PM
    • #4
    • 7th Mar 18, 6:23 PM
    Hi,

    I've also been told something else.

    Apparently, some credit referencing agencies don't distinguish between "Closed - Partially Settled", and "Closed - Fully Settled". They just record the debt as "closed" or "settled".

    Is this true? It seems unlikely. I don't want to call out anyone on this - but I heard this from a very reputable source, from a very reputable company, and he was quite clear about it.

    He did continue to say that, for example, CallCredit do distinguish between "Closed - Partially Settled", and "Closed - Fully Settled", but others do not.

    He stressed that the most important thing was whether the account had defaulted, or missed payments, before that point. But neither of these apply to me - I kept up to date with payments.

    I know that if someone asked for a detailed copy of my credit score they could likely find something about it on there. But I'm not applying for a mortgage anytime soon. I'll need a new mobile phone next year, and basic credit to have a electricity account, but that's about it. I'm just curious about how this will affect me.

    Please could someone clarify?

    Thank you.
    • glentoran99
    • By glentoran99 7th Mar 18, 6:25 PM
    • 5,248 Posts
    • 4,444 Thanks
    glentoran99
    • #5
    • 7th Mar 18, 6:25 PM
    • #5
    • 7th Mar 18, 6:25 PM
    Hi,

    I've also been told something else.

    Apparently, some credit referencing agencies don't distinguish between "Closed - Partially Settled", and "Closed - Fully Settled". They just record the debt as "closed" or "settled".

    Is this true? It seems unlikely. I don't want to call out anyone on this - but I heard this from a very reputable source, from a very reputable company, and he was quite clear about it.

    He did continue to say that, for example, CallCredit do distinguish between "Closed - Partially Settled", and "Closed - Fully Settled", but others do not.

    He stressed that the most important thing was whether the account had defaulted, or missed payments, before that point. But neither of these apply to me - I kept up to date with payments.

    I know that if someone asked for a detailed copy of my credit score they could likely find something about it on there. But I'm not applying for a mortgage anytime soon. I'll need a new mobile phone next year, and basic credit to have a electricity account, but that's about it. I'm just curious about how this will affect me.

    Please could someone clarify?

    Thank you.
    Originally posted by BristolMan


    They record what the creditor tells them, I have partially settled on all credit files.


    I'm interested though, if you kept up to date why would they accept partial settlement? this is usually only the case if you default
    • BristolMan
    • By BristolMan 7th Mar 18, 6:31 PM
    • 15 Posts
    • 2 Thanks
    BristolMan
    • #6
    • 7th Mar 18, 6:31 PM
    • #6
    • 7th Mar 18, 6:31 PM
    Hey,

    Yeah - but I've been told that credit referencing agencies only use specific terminology in respect of credit files. And some only use the words "settled" or "closed", irrespective of whether this was in full or part.

    So - yes, they will record what the lender asks them to record, but surely they, the CRA, have to use their own terminiology.

    So - when you login and check your files, you see the phrase "partially settled"? Which agencies is that with? Does it say how much was outstanding? How has that affected you?

    Regarding the reasons why they accepted settlement - I don't want to go into detail, but it's to do with my health and likely future.
    • glentoran99
    • By glentoran99 7th Mar 18, 6:40 PM
    • 5,248 Posts
    • 4,444 Thanks
    glentoran99
    • #7
    • 7th Mar 18, 6:40 PM
    • #7
    • 7th Mar 18, 6:40 PM
    Hey,

    Yeah - but I've been told that credit referencing agencies only use specific terminology in respect of credit files. And some only use the words "settled" or "closed", irrespective of whether this was in full or part.

    So - yes, they will record what the lender asks them to record, but surely they, the CRA, have to use their own terminiology.

    So - when you login and check your files, you see the phrase "partially settled"? Which agencies is that with? Does it say how much was outstanding? How has that affected you?

    Regarding the reasons why they accepted settlement - I don't want to go into detail, but it's to do with my health and likely future.
    Originally posted by BristolMan

    Mine were all defaulted first, so not sure it will be the same but ill take a look
    • BristolMan
    • By BristolMan 7th Mar 18, 6:46 PM
    • 15 Posts
    • 2 Thanks
    BristolMan
    • #8
    • 7th Mar 18, 6:46 PM
    • #8
    • 7th Mar 18, 6:46 PM
    Ah - so it might show as default for a bit, before it shows as settled?

    Yeah - please let me know.
    • glentoran99
    • By glentoran99 7th Mar 18, 6:47 PM
    • 5,248 Posts
    • 4,444 Thanks
    glentoran99
    • #9
    • 7th Mar 18, 6:47 PM
    • #9
    • 7th Mar 18, 6:47 PM
    Equifax says - Partial Settlement on one but settled for another, both were partial


    The only account showing on all three seem to be marked satisfied or settled on them all rather than showing the partial, ive got lucky there


    Others I settled have dropped off but the showed partial settlement I'm sure of it
    • glentoran99
    • By glentoran99 7th Mar 18, 6:48 PM
    • 5,248 Posts
    • 4,444 Thanks
    glentoran99
    Ah - so it might show as default for a bit, before it shows as settled?

    Yeah - please let me know.
    Originally posted by BristolMan


    If they agreed settlement they might not default. Beyond my own experience though.


    Balance even if partially settled should show as zero though
    • BristolMan
    • By BristolMan 7th Mar 18, 9:07 PM
    • 15 Posts
    • 2 Thanks
    BristolMan
    Wow - so, it's not really even that bad then...

    Even though I'm going to be VERY careful from this point on, I was worried that my bank might discover this and roll my overdraft in.
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