A reader asked if she has to pay a debt that she can’t see on her credit record.
Many people think that checking their credit record is a good way to get a complete list of their debts. And they look forward to a defaulted debt disappearing after 6 years because then they don’t owe the money anymore.
These are myths – and although they sometimes are right, they often aren’t.
What debts show on a credit file?
You may think your credit record shows the detail of your borrowing and repayments over the last six years.
But they aren’t always a complete list of your debts – they only show records from some lenders.
Almost all commercial lenders such as banks and credit cards report data. But there are three Credit Reference Agencies in Britain – Experian, Equifax and TransUnion – and many lenders only report to one of the CRAs, not all three.
And they often don’t show old information. Lenders want these records to make decisions about future lending and they care much more about recent problems than old history. So they have all agreed that they don’t want to see data about defaults more than six years ago and the CRAs delete this data.
If you are paying a debt normally, it stays until you have repaid it fully leaving a zero balance then it drops off after six years.
When a default has been recorded the debt disappears after six years. But this debt still legally exists – it has only gone because the problem was so long ago that future lenders don’t want to know about it anymore.
So what debts do you have to pay that aren’t on your credit report?
There are three common reasons why you have to pay a debt that’s not on your credit report.
Debts which are reported to a different credit reference agency
If you check your Credit Karma credit report, you will debts which are reported to TransUnion. But if you owe money to a lender who only reports to Experian and Equifax, that debt isn’t going to appear.
So the report from one of the CRAs that you are looking at is not a complete list of your debts.
If you get reports from all three CRAs (see The best way to check your credit records for how to do this without paying anything) that gives you more information but there may still be debts that you owe which aren’t on any of them.
Debts defaulted over 6 years ago but where you have made payments within 6 years
These debts will have dropped off your credit reports because the default was over 6 years ago.
If you hadn’t made a payment for more than 6 years, the debts may be unenforceable because they are statute-barred. See Questions about statute-barred debt for details and talk to National Debtline about your situation if you think one of your debts may be statute-barred.
But if you have made a payment within the last 6 years, the debt is not statute-barred and the creditor can still take you to court for a CCJ … so you need to pay them.
This often happens if you are in a long debt management plan. If you stop making payments to these debts or don’t talk to a debt collector who contacts you about the debt, you may get a CCJ which will reappear on your credit record and also bailiffs or other enforcement problems. In 2019 more than a million CCJs were registered.
However as the debts are old, you may be able to get a full and final settlement agreed.
And if the debts are very old, the debt collector may not be able to produce the right documentation. Read Ask a creditor to produce the CCA agreement for details about why this is important and when to ask for this.
You also can’t assume that a mortgage lender won’t be able to see debts that have dropped off your credit record. Mortgage lenders have other sources of information they can use.
Some creditors don’t report to the credit reference agency
Some sorts of debt never show on any credit records: council tax arrears, magistrates court fines, benefit overpayments, what you owe a builder, nursery school fees, a subscription etc.
These are all legal debts even though they don’t show on your credit report.
What if you can’t afford to pay those debts?
If you get a letter about a debt that isn’t on your credit record you can’t assume that you can ignore it.
When you know the debt isn’t yours, because you have never taken out a payday loan or had a mobile from that provider say, then you should ask the debt collector to Prove It! as they have got the wrong person!
It isn’t safe to ignore a debt because you can’t pay it. You can either try to come to an arrangement with the creditor or get advice on your full financial situation. The more debts that you have, or if you have any priority debts, the more important it is to get proper advice.
There is a range of good places that can help, depending on the sorts of debts and whether you would like phone or face to face advice.