A reader asked:
My credit score isn’t following the rules you described on How much will my credit score change if…?
I cleared a default two months ago and my score hardly changed. And four days ago another default should have gone but I can see it’s still there on ClearScore. What do I have to do? Should I complain to ClearScore or the creditors?
Trying to sort out a poor credit score can sometimes feel like you are stuck in a maze. You know where you want to get to but some of the paths seem blocked or don’t work. But for this reader, there are a couple of simple explanations.
Why didn’t repaying a debt make a difference?
Repaying a debt you have defaulted on must be good, right? Yes it is… but it won’t change your headline credit score. because the calculations don’t pay any attention to it.
So the reader can’t get this “corrected” because the system is working the way it is supposed to.
But paying that default was important for two reasons:
- now the debt is repaid, there is no danger of a CCJ. And a CCJ would have harmed his credit score for another six years.
- lenders make their own assessments of your credit record. They don’t use the credit score that shows on ClearScore or any other reports. Many lenders may be prepared to lend to someone who has paid off defaults as that shows they have resolved their financial problems. Even some mortgage lenders may happy if a default has been paid off over a year ago.
Why hasn’t the old default dropped off?
The answer here that it has gone from the reader’s credit record. All defaults go six years after the default date, whether the debt has been settled or not.
It is still showing on the ClearScore report because that is a snapshot of a credit file at Equifax that can be a few days or weeks old, see What are our services? where ClearScore says:
We get this information from Credit Reference Agencies once a month on your behalf.
So the reason the defaulted debt is still there after more than six years is because the reader is looking at an old report. It will get corrected sometime in the next few weeks. When he gets an up-to-date report, that should have an improvement to his credit score without the defaulted debt. How much it improves will depends on what other problems there are – if there are lots of defaulted debts, the first one going won’t make a big difference.
If you are in this situation and you don’t want to wait, look at the table in The best free ways to check your credit score for the options which says they are updated daily. In this case the Equifax Statutory Report is free and it is updated daily. That will prove the defaulted debt has disappeared.
How can you improve your credit score faster?
This depends on what the problems are on your credit record.
If they are defaults or missed payments, then the problems will improve with time as they get older and then drop off your credit record. There often isn’t much you can do to speed this up unless you think a default is unfair and you can get it removed. See Can I get a default deleted? which looks at the situation where this will work and those where it won’t.
If your main problem is that your credit card and overdraft debts are too large then this can take a long while to resolve. Stopping spending on the cards and paying more than the minimum every month will work but it takes time. for overdrafts, many people find they have to get a new bank account and then treat the old overdraft as a debt to repay.
Who do you complain to about a problem with a debt on your credit record?
So the reader doesn’t have to complain. But if he did, who should he talk to? In most cases, the answer is the lender. Experian, Equifax and CallCredit – the three Credit Reference Agencies – just report the data they are given.
So if a debt has been settled but shows as still having a balance owing, or has the wrong default date, you need to get the lender to correct this. If you complain to a CRA, they will just pass on your complaint to the lender – so skip the middle man and get it sorted directly.
There are some situations where the CRAs can help, see the following articles: