A reader asked:
I have a debt with a default date 30 April 2013. I was paying the debt for about a year then stopped as the default would always be on my file in any case.
Will the debt drop off in 2019, or will it extend to 2020 as I was paying it for a year? Do settled accounts affect your credit score?
The simple answer is that all defaults drop off your credit record after six years, but this situation as it isn’t all good news for the reader.
Debts always disappear 6 years after a default
A debt will be deleted from your credit record six years after the default date. There are no exceptions to this rule so it applies if:
- you have repaid the debt in full – the date you repaid it doesn’t matter;
- you made a partial settlement (also called a full and final settlement) – again the date of the settlement doesn’t matter;
- you are still making monthly payments to the debt;
- you aren’t making any payments to the debt.
His default date was 30 April 2013, so by the end of April 2019 the debt will have gone.
One point that can confuse people is that after a default has been added, another default is added each month. These don’t affect your credit score and don’t matter for when the debt drops off – the first default is the real one.
Do settled accounts affect a credit score?
I’m not clear what the reader was asking, so I will answer some variations.
Will settling a defaulted debt showing on your credit record improve your credit score?
No. You may think this is weird but paying off a defaulted debt does not help your credit score.
Will settling a debt once it has dropped off your credit score cause it to reappear at all?
No, it will never come back.
Once a debt has dropped off your credit record will it affect your credit score?
No. Once it has gone, it doesn’t feature in the credit reference agency’s calculations of your credit score. There is no secret database of debts that have dropped off credit records. The only lender that may take account of it in future is the lender you defaulted to, who may see the default on their internal records.
The bad news – a CCJ is still possible
As the above answer show, all the immediate news for the reader’s credit score is good.
The bad news is that even though the debt drops off his credit record, it still legally exists.
Because he last made a payment in 2014 sometime, it will not become statute barred until at least six years after he missed a payment to it which will be in 2020 – or possibly later.
Up until that point, the current creditor can take him to court and get a CCJ – that would then appear on his credit record for another six years even though the underlying debt is no longer there. It can be hard to be sure exactly when a particular debt becomes statute-barred as there was a new court judgement in January 2019 which affects some debts, see Common questions about statute barred debt for more information.
And this isn’t some theoretical possibility, it is unfortunately quite likely.
There were more than 1,150,000 consumer CCJs in 2019 – the highest number ever and more than twice as many as 8 years ago.
It is common for a debt collector to wait until the last 6 months before a debt becomes statute barred before going to court. Read No calls or letters about a debt for years which looks at this situation.
When can you get a default deleted?
How much will my credit score change if…
Should you get a loan to repay a default?
Bette says
Hi Sarah
i’m wondering why it is that DCA’s are not aware of debtors original default dates. Even if a debt is sold on several times why is not the original default date included in the information when sold on from DCA to DCA?
Alternatively why do DCA’s not check for the original default date set by the original creditor on the debtors credit file? surely the credit file would also show if any payments were made after the original default date and therefore statue barred would not apply until after the last payment? – am i missing something?
Sara (Debt Camel) says
What makes you think creditors aren’t aware of the default date used by the original creditor?
If you have a DCA that is using a later date, send them a complaint and tell them to use the OC date – but this isn’t a common problem to see.
Statute barring has LITTLE OR NOTHING to do with the default date. Some DCAs argue (incorrectly) that the 6 year limitation period start with the default date. But I never heard of one arguing that a later payment after the default date doesn’t stop the statute barring – that wouldn’t be in their interest after all.
luis says
Hi Sarah,
Hope you can help with this question.
I have received an update on my credit score stating that there is a Court Judgement against me for a total amount of £237 from a parking fine issued on 02/05/2014. I wrote to the claimant in January and got no response so I was thinking of paying it anyway so I can settle this CCJ.
Would this affect me credit score if I want to buy a house in the next 6 months?
Thanks
Sara (Debt Camel) says
The chance of you getting a mortgage at an OK rate is close to zero even if you pay this now. If you knew nothing about this CCJ before January, I suggest you talk to National Debtline, see https://www.nationaldebtline.org/, asap about whether you can set aside the CCJ and how to do this.
Marion says
My friend cosigned for her then ex husband to get a RV when they separate he defaulted on the loan. Is is the same amount of time 6 years before her credit comes clear .or in someway this will still effect her.
Sara (Debt Camel) says
I think you live in America? This website only covers English credit reporting rules, they are not the same in the USA. Sorry you need to talk to someone locally with your query.
Mark Hughes says
I recently had a CCJ appear on my credit report. It was from a defaulted debt that had fallen off my report a few years ago. I have today successfully had it set aside, subject to a Tomlin Order, as the CCJ papers were served at the wrong address.
Deborah McAteer says
I have a default on my account from November 2013 does that mean that coming this November it will drop off having passed the 6 years?
Sara (Debt Camel) says
yes, a default date of 14 November 2013 means it disappears 6 years later on 14 November 2019.
Deborah McAteer says
Thank you,
Thats great news!
A mortgage adviser said i should wait before settling the payment as it would appear like a brand new default on my file.
Thank you so much!
Sara (Debt Camel) says
It won’t. It will drop off if it is paid in full, paid partially or not paid at all.
Diane says
Hi Sara
Over ten years ago I fell seriously ill and could not work for 2 years. I am a house owner with a mortgage and at the time had several credit cards, a catalogue, a secured & personal loan . Long story short as I could not met the minimum payment all my accounts fell in to arrears and defaulted. I came close to being declared bankrupt. My last default fell off my credit account Dec 2017.
I was advised to contact the citizen advice who helped me to negotiate minimum payments of £1 and I was transferred to PayPlan once i was able to return to work. This year I arranged a drawdown on my pension and offered discounted repayments to all my creditors via PayPlan which were accepted.
Recently, I have received letters from 2of those creditors informing me that if the debt was still registered on my credit account (which they are not ) it would be marked either partially settled, paid in full or settled with a discount (they were all settled with a discount).
My question is, can they go back to my credit file to record that the debt settled with a discount?
Sara (Debt Camel) says
No they can’t. See https://debtcamel.co.uk/ff-credit-record/
Brian connell says
Hi Sara,
I had a default with Santander which I agreed to pay at a lower rate it was going ok then 3 years no missed payments they have issued a CCJ which now become 9 years bad data on my credit file really any advice please am paying it any way.
Sara (Debt Camel) says
Are you now paying it at a higher rate than you were before the CCJ?
Brian connell says
Hi Sara,
I am paying the same amount but due to costs with CCJ extra £1,500 as been added to the debt.
Shi says
I have a debt on my account for £213 from 17 june 2012. It should have dropped off this year … on my clearscore report they update it every month it says last updated 9 august 2019 ….. im not in contact with them ? I dont know what to do here…
Sara (Debt Camel) says
Is there a default date against this debt? What sort of debt was it, a loan, credit card, overdraft, or what?
Nick says
Hi Sara,
I have a defaulted credit card listed against me £4000). I made a deal with the CC company and paid it off for a lesser amount. The default is due to come off at the end of next month. It’s been along six years….I don’t want to get my hopes hope too much but what do you imagine the effect on my score will be? I have no other defaults and my other credit accounts are all in good standing.
Thanks
Sara (Debt Camel) says
This article has some numbers https://debtcamel.co.uk/credit-score-change/. But it really depends what is on the rest of your credit record and which credit reference agency you are looking at.
Micah says
Hi Sara,
I have two unsettled defaults both being paid monthly, but both drop off my file within the next 35 days. Totalling £500
I had a CCJ which dropped off in September.
I now only have 1 default for £97 which is paid and settled, this drops off in 2020.
I just wanted to check my mortgage chances at the end of October? Will that 1 remaining default ruin my chances even though it has been paid?
Thanks
Sara (Debt Camel) says
It’s not just your credit record that is a problem. An old paid default should be OK> but if you are still paying unsettled defaults (and is the CCJ settled?) then that will show on your bank statements and may cause a problem. You want all your defaulted debts settled, on you credit record or not.
Md sha says
Hi Sara
Can you help me I got debt around 4000k cridit card overdraft payday loans mobile bill if I pay this mony 1 years then my cridit score is come back .then apply loans or mortgages after 1 yers pay all my cridit record is clear good many thx
Sara (Debt Camel) says
These debts, have you missed payments to them? Do you have defaults showing on your credit record, if yes, how long ago were the default dates?
Alan says
Hi
I had a lot of defaults from 2013, most of which have dropped off my credit report. I final default is coming off around January next year. I have a couple of credit cards and a loan I have just paid off. My credit score is slowly going out. Once this final default is removed, should I see a significant improvement in my credit score?
Sara (Debt Camel) says
Probably! But are there any missed payments or payment arrangements showing? And your credit cards, is your balance using a lit of the credit limit?
Alan says
Once this default is removed I have no late payments or any issues with any credit accounts. Everything else is up to date with no missed payments and I have high credit limits and are well within them. My Experian score is only 658 out of 999 – poor. I read that a default deducts 300 points which is reduced to 250 after 2 years and 200 after 4 years. Based on this, does my score go up by 200 when its removed?
Sara (Debt Camel) says
It should be something like that! Come back and say what actually happened… It is going to help your score if you can get the credit balances down to under 30% of your credit limit, see https://debtcamel.co.uk/credit-score-change/
Alan says
Hi
Just to let you know that my final default has been removed and my score increased by 120 points.
Thanks
Gemma Bradley says
Hi,
I have a defaulted overdraft that is due to drop off my credit report 1 year from now. The original amount was £2001. I was paying £1 per month for several years and more recently after clearing other debts I have upped the monthly payment, the debt now stands at £1740. I will be increasing the monthly payment and should clear another £200 min by the time the 6 years is up.
My question is, how likely is it that the collection agency (Moorcroft) will pursue a CCJ as I am continuing to repay and also making efforts to up the payments? I have never actually spoken to them and they don’t have my current address.
Thanks in advance.
Gemma
Sara (Debt Camel) says
Sounds unlikely to me if you have recently increased your payments. Is there a particular reason you are worried about this?
Gemma Bradley says
I am just inexperienced in the matter and don’t want to end up with another 6 years of bad credit as it has been difficult. I had to resign from my business on paper so my business partner could open a bank account without me- I don’t want to continue to be a burden on the business like this and figure I have a year to think of solutions if this is very likely to happen. I will keep paying as much as I can and am due some tax back next year so will use that too to show even more willing before the end of the 6 years. Thanks Sara
Sara (Debt Camel) says
If you get a reasonable amount of tax back you can always offer a partial settlement. It will be off your credit record so this will never show.
Gemma Bradley says
No it will be £100 if im lucky. I’ve been thinking of other potential sources of money I can put towards it and best case scenario I will clear another £400 by the time the 6years are up and should be repaying £30 a month at that time, hopefully that will keep them at bay. I don’t have any contact with them and they have an old address so unless they track me down and offer a F&F I will avoid contacting them and keep paying it all off over the next 3 years. I wouldn’t be able to gather the cash for an F&F.
Thanks
Lewis says
I have had a default from 2016 pop up on my credit file, the lender has agreed to take it off a few days ago but its had not yet been removed, the problem is i have a mortgage broker waiting to put through the application for the mortgage but i need it to go to do so,
How long you think it takes to be removed as the lender said within 24 hours and it has now been over 48?
Sara (Debt Camel) says
if it is going through the normal procedure, sometime in the next month.
Lewis says
Ive just signed upto a few credit score sites and it has been removed, and my scores gone upto excellent! So good news, i think it was the site i was using may take a few weeks to update
jon says
I am currently in a DMP (debt level around 5k) and my defaults are approaching the 6 year mark this year , the earliest due to drop off is in March . I am desperate not to get a CCJ but cant afford to clear all the balances before then. I intend to clear the 4k within 2 years . Debts mostly two closed overdrafts and credit cards . What can I do not to get a CCJ ?
Sara (Debt Camel) says
Carry on paying the DMP!