A reader asked if starting to pay a defaulted account will help his credit score. The simple answer is No!
But there are very good reasons why paying defaulted debts will improve your general credit situation, making it easier for you to get a loan, a mortgage or a credit card in future. That credit rating number isn’t the only thing that matters!
To start, it’s good to know what your credit history is now by checking all three credit reference agencies.
Six years is the important date
A defaulted account will drop off your credit record six years after the default date.
It doesn’t matter what happens after the default – whether you pay the account in full, start paying it, agree a partial settlement or don’t pay anything at all, the account will still be deleted after six years.
So find out what all your default dates are. If you think one is too late, read What Should the Default Date Be? which explains how to get an incorrect date changed.
Your credit record gets better after six years unless…
This may sound as though your credit score will get a lot better after six years even if you pay nothing. This is correct, but there is one big exception – your creditor may take you to court and get a County Court Judgment (CCJ). This CCJ would then stay on your file for another six years. Most lenders regard a default as bad but a CCJ as worse.
You may be hoping this doesn’t happen, unfortunately after five years and a few months, a debt collector may contact you and threaten court action if you don’t set up a payment arrangement. If you have moved and not told the creditor your new address, you could get a CCJ without being aware of it.
If this doesn’t happen and the defaulted account drops off, then your credit score will improve immediately. How much will depend on what else is on your credit record – if you have a lot of other debts still showing you may not notice the difference until the last ones go.
Older defaults are less bad for your credit score
Your credit record starts recovering from a default before the end of the six years. I asked Experian how their credit rating calculations changed as a default gets older. The following numbers show what happens to Experian’s credit score if there is only one default and if nothing else changes on your credit record:
- in last 2 years – 350 points
- 2-4 years ago – 250 points
- 4-6 years ago – 200 points.
In practice there is almost always something else changing every month, so you shouldn’t expect to see those exact numbers but they give a feel for what is going on. For some more examples of how much different things affect your credit score, read How much will my credit score change if… ?
Your credit score doesn’t improve faster if you settle the debt, but…
Most people will expect that if they repay a defaulted debt their credit rating will suddenly improve. This doesn’t happen. So you may wonder why you should bother!
There are two very important reasons to start to repay a defaulted debt.
- if you are making payments a lender is a lot less likely to go to court for a CCJ. A CCJ is much worse for your credit record than a default, and it would be on there for another six years.
- lenders all make their own assessments, they don’t just use a credit score. Many lenders regard a settled default, as much less of a problem. So by repaying a defaulted debt you are more likely to get approved for a new loan.
That last point is especially important for mortgage applications. You are very unlikely to get a mortgage at a reasonable rate if you have unpaid defaults. The sooner you can repay them the better.
Each lender sets their own rules, but a current rule of thumb is that if all your defaults are over three years old and they have been repaid for more than a year, it’s worth talking to a broker about whether a mortgage is possible.
Is it worth making low payments to a defaulted account?
Low payments won’t make much of a dent in your debt, even if interest and charges are frozen. There are positive reasons in favour of token payments – once agreed with your creditors, they will reduce the hassle you get and also make it less likely that you will get a CCJ – but they aren’t going to improve your credit record or make it more likely you will get more credit.
If you expect your situation to improve, then low payments are a good option, but if this seems unlikely then you should probably look at what your alternatives are.
Conclusion
So although the answer to the reader’s question was No – repaying defaulted debts won’t improve his credit score faster, this isn’t really the full picture. A better reply is:
Your credit score will improve gradually as your defaults get older. This doesn’t speed up when you repay a defaulted debt, but some lenders are only likely to lend to you once defaults have been paid. And starting to repay debts makes a CCJ much less likely, which would make your credit record worse.
This article was originally written in 2015. It was updated in 2017 with the details of how Experian treats defaults as they get older.
Some debts Settled and some Satisfied – why?
Can you get a mortgage if you have debts?
FAQs on statute barred debt
Mrs Y says
I noticed by chance on my credit record that I had a CCJ applied in August this year and I had no idea why?! I called the court that applied the judgement who advised that this was for a parking violation back in Feb, I moved house at the beginning of March so never received the actual details of this violation and then subsequently never had sight of this getting into CCJ territory. I was mortified to see this on my credit file and more importantly I am devastated that I was never given the chance to settle this (if I was proven in the wrong in the first place) before it got to this point. I have been advised that I can pay £255 to try and have this judgement removed however this amount is more than the the debt itself (£185). Would my situation of never being aware of this debt in the first place potentially give me a good chance of having the CCJ case aside? I don’t know what to do and i am currently sick to my stomach with anxiety over this as I have always been squeaky clean with finances. Advice welcome.
Sara (Debt Camel) says
hi, this is such a difficult situation. I suggest you phone National Debtline on 0808 808 4000 and talk about your options.
charlotte says
Hi did you ever go to court in the end? Like you I too have received a CCJ without any knowledge for an amount of £600 after court fees. The only difference been that it was through my university for uni damage in my halls. I never received any letters or documentation of any court action prior or after. It has now been three years and they still have taken no action even with the CCJ in place. I’m not sure if to appeal it due to not receiving any of the documents when my university had my current Home address all the way through uni and now also and also my temporarily term address too. I do take some ownership for the damage however feel how they handled it and explained it was not sincere. No one is able to give me legal advice without paying a ridiculous amount didn’t know if you had any look with this?
Sara (Debt Camel) says
Hi Charlotte,
Please talk to National Debtline on 0808 808 4000 about your options. They don’t charge!
Finding what someone else did wouldn’t really help you as all these cases are very individual. You may have a much stronger or weaker case than Mrs Y.
Ella says
I have one default on my account Of 2000 but now I’ve been paying it’s gone down to 1000 it’s been less than a year but I want to get into buying and selling houses in about 4 years time if I finish paying off my default buy the end of this year would it put me in a better position for a mortgage in 4 years Please I think I am also on the Cifas for 6 years can my employers or anyone else see that
Sara (Debt Camel) says
Yes, paying off defaults helps with getting a mortgage later while the defaults are still on your credit record.
But you are going to find it very difficult to get a mortgage with a CIFAS marker. Lenders will see it. Employers won’t normally unless it’s the sort of job that runs a credit check on you.
Ella says
Thank you
What else does the CIFAS market restrict me from doing
It doesn’t show on my credit score on check my file
Sara (Debt Camel) says
Cifas markers tend to affect credit and insurance applications. It sounds as though you need to check if you are on the Cifas database, see https://debtcamel.co.uk/name-fraud-database/.
Mihai says
Hello. I have a default account . I paid it off in full last month . I had some problems and i could not pay in time so at the moment all my debts are paid . My score is poor . Will my credit score get better in the next 8-10 months as i will be trying to get a mortgage. Or will i have any chance of getting one?
Sara (Debt Camel) says
As the article above explains, paying a defaulted debt doesn’t improve your credit score. What was the default date for this debt?
Mihai says
I think it was July when i agree with them to pay less for 3 months after i ask for extra 3 month but paid it in full one month and a half before . I was paying less the usual but i was paying just ask for some time to get things sorted. So i started having trouble 5 months a go.
Sara (Debt Camel) says
So your problem was all resolved after one and a half months? Then you were back to normal payments?
mihai says
After the extra one month and a half i paid in full my credit. So yes i was ok with the loan paid everything i own them .
Sara (Debt Camel) says
Then I think you have a case to say that a default should not have been added, that you were only ever 6 weeks behind and then your account was brought back to what it should have been. Send them a complaint and ask for the default to be deleted and replaces by a “late payment” marker.
Sarah says
Hi, I took out an account with swimwear 365 in 2017 and thought I had a DD set up. I received some very standard looking photocopied letters from JD Williams relating to paying an account – but as I’d never heard of JD Williams assumed it was a mistake. There was no official notice of arrears or anything. I’ve since learned that they own swimwear 365. The account was only £150 but they’ve added a default to my account. I would have made payment if id been alerted to this in a clear way. Is there anything I can do?
Sara (Debt Camel) says
Have you gone back to your bank statements and checked the swimwear 365 account was not paid?
Nick says
Something worth bearing in mind about defaults and credit scores is that the bureau scores are almost irrelevant for most credit card applications. I had some defaults 5 years ago, all since settled, and my credit score has slowly gone up from very bad to good after 5 years of paying off cards in full each month. However, my experience has been that even with a “good” score no mainstream bank will offer credit while a default remains visible, so it is basically a 6 year wait unless you want a “bad credit” card or loan. Mortgage and personal loan brokers may be more flexible, but in my experience not the mainstream credit card providers.
Anita says
I have a default on my credit score in which the debt has been paid and the 6 years is up in January 2020 once this is removed will my svore improve emough for my creditors will give me a better rate.
Sara (Debt Camel) says
That depends on the rest of your credit record. if you have a lot of other problems, one default dropping off may not make a lot of difference. If this is your only problem you may see a big improvement.
Hannah says
i have a ccj that i haven’t been able to settle that is going to drop off my file this year (July) after this time, will mortgage lenders still be able to see this, or does it disappear for everyone? Understand they could potentially issue a new court order, but if they don’t…would they?
Sara (Debt Camel) says
Are you making payments to this CCJ?
Richard says
I am in the same situation making payments through Stepchange DMP. Interested to know if they vanish or if they are still logged in some way?
Sara (Debt Camel) says
It will vanish from your credit record, but you can’t stop paying as they could then try to enforce through bailiffs, deductions form earnings etc
The creditor that took you to court will still know about the CCJ from their internal records.
DF111 says
Hi, hope everyone is well.
Interested in some advice. I have four credit cards with total debt of £24,000. Due to health problems I lost work & accumulated debt.
I contacted all four lenders when I could no longer make minimum payments. My accounts were then held in the special cases team. Since then however, three lenders have marked defaults on the accounts & one lender has passed the debt on to Wescot.
My questions are:
1) Is it better to fully pay all debt off if possible? Does “partially settled” affect future credit scores / mortgage applications?
2) How do I pay the original lender without getting Wescot involved?
Many thanks for all advice.
Sara (Debt Camel) says
How long ago are your defaults? Are you now back at work with no health problems?
Martin says
Hi I just need a little bit of advice. I have 2 defaulted account both £1500 and I will be able to pay them off by the summer by paying £500 each month. I also want to build my credit score in the process. What is the best way to do this? Could I get a credit card and pay £500 to my defaulted accounts each month and repay £500 to my new credit card? Any advice would be appreciated
Sara (Debt Camel) says
If you have two unpaid defaults on your credit record, you would struggle to get a credit card except at a very high rate of interest. I suggest you simply repay the debts. Then later think about rebuilding your credit score.
Martin says
Thanks for the advice.
Will my credit score go up much by paying off my defaults?
Sara (Debt Camel) says
Not it won’t go up at all! But it may make lenders more prepared to lend to you and it means there is no chance of being taken to court for a CCJ, which would make your credit score go down.
How long ago are the defaults?
Martin says
The accounts went into default last year.
How much do creditors normally take off debt when you ask for a settlement fee?
Also once I’ve paid my accounts off would I be able to apply for a mortgage even though they will show up on my credit file. My credit score is sitting at 482 out of 700 on credit karma. I thought that was a pretty good score considering I’ve got 2 accounts in default but on the website it says it’s low.
Emmanuella says
Is there anyway to remove a Cifas marker
Sara (Debt Camel) says
Read https://debtcamel.co.uk/name-fraud-database/.
Kirsty says
Hi. I have a number of defaults on my credit file but I want to move house which would involve getting an increase on my current mortgage. All the defaults are almost four years old and all bar one has now been paid. Firstly, how likely am I to be accepted for a higher mortgage with my current high street lender. And secondly, I have the money to pay off the remaining default. Is it better to do this (will it increase my chance of a mortgage acceptance) or will it be better to keep hold of the cash to put towards the house deposit?
P Singh says
Hi There,
I have 3 defaults:
LLyods £1357 – Agreed to accept £678.50
Co-op £290 – Not spoken to yet about doing a deal
Tesco Mob £80 – Not spoken to yet about doing a deal
My quick question is that I have a little more income now and I can pay all 3 debts off in full if required (but would rather not!). Llyods have offered me a deal at 50% and the other 2 i have not spoken to yet. I only care about improving my credit file to get a mortagage for a buy to let property.
My quick question – Shall i pay all 3 off in full or shall I partially satsify as a full and final settlement? If I partially pay full and final whilst this clears the default notice off, will it still look “bad” to a future lender that I only partially paid the debt as opposed to settling the debt in full?
If it DOES make a difference then I suppose I would pay in full.
If it DOES NOT make any practical difference/ little difference I would rather do a partially satisfied deal with all 3 lenders.
Thanks for any help!
Sara (Debt Camel) says
It’s a difficult question. See this article: https://debtcamel.co.uk/dmp-partial-settlement/.
Richard says
I had a bad run and was irresponsible with money in 2014 september and october. I have a ccj which i pay off october 2020 and all my defaults drop off the same period how will this affect my credit score. Atm it is 498 am looking at buying a canal boat to live on within a year or 2
Sara (Debt Camel) says
Will you need any form of credit to buy the boat?
Are you making payments to the defaults still?
Richard says
Im paying off all the outstanding debts have just got a car on credit which toke a dent to my credit rating but needed it. I pay off all my bad credit by the end of this year and a few are done within the next few months and i will need a personal loan for about £20000 for the boat with cash put in myself
Sara (Debt Camel) says
ok, well you will find it hard to get a loan for 20k without a very good credit score, a decent income and having repaid all the defaults. but it sounds as though your credit score should get up to very good. Repaying the car finance will help after the initial hit.
Richard says
My last default was 2014 october how soon after that should i see my score improve i did a get ccj in 2018 june due to having to move very quickly due to suffering DV this is paid off in august
Sara (Debt Camel) says
ah. With a CCJ on your credit record it will never get up to good I am afraid. Clearing it is is good but it doesn’t actually help your credit score. You are likely to struggle to get a large loan until it goes in 2024.
Richard says
With the ccj being paid off in july august time will this improve my chances of getting the loan im happy to pay a higher interest rate. I am confused as i got a 12000 car on HP in march and have got a 2 credit cards since having the ccj. Onky use my credit cards as emergency amd pay it off asap use ine at a time
Will me paying the ccj off later this year help my score and i have got a credit card and 12000 car on hp since having this ccj applied. So asyou can see i am doing the right thing. I am getting the boat to live on full time aswell
Sara (Debt Camel) says
With the ccj being paid off in july august time will this improve my chances of getting the loan
Yes. few lenders would lend 20k when you have an unpaid CCJ! But that doesn’t mean you will find it easy.
What rate of interest is the car HP?
Richard says
22.3% apr and i wont be applying until all my defaults and the ccj has been paid off as im paying as much as i can to clear this thank you so much for your advice
Sarah says
Hi i have looked at my cerdit file. £
I have 1 ccj paid off recently but was put on in 2017. I also have 4 defaults one of these i know i make payments but, the other 3 i have no idea who to make payments to or how to begin to find out. There is also an account on it saying in arrears from back in 2014 i have no idea who this is for all it said is instant cash loans and when i look it up loads of places come up. I wish they taught us in school that this is what happens! At 20 years old you think all these loans are great! Now im nearly 30 partner wants to try for a mortgage but there is no way i will ever get one!
Sara (Debt Camel) says
there is no way I will ever get one!
Time is the great healer of credit records… you need to look closely at yours and work out when they will be much better. Repaying the debts will not by itself improve your credit score, you need to know the details and the dates.
The 2017 CCJ will disappear in 2023.
What are the default dates for the 4 debts that show on your credit record? Do make sure you check all three credit reference agencies, see https://debtcamel.co.uk/best-way-to-check-credit-score/.
And who are the current creditors as they may have been sold to debt collectors – it’s not bad if they have been sold, it is usually easier to get a debt collector to accept a settlement offer and some debt collectors may not have the right debt documentation so the debt may be unenforceable.
The Instant Cash Loans debt – this is probably a loan from the Money Shop, Payday UK or Payday Express – do any of those ring a bell? What does it say the start date of the loan was?
JM says
Hi,
I’ve been rubbish with money a few years back and finally got my act together… I want to get a mortgage next year and have the below. what’s best to settle first, does settling in full make any difference and am I likely to be able to get a mortgage based on the below?
Date of Default December 2018 – £2k settlement £1k to clear.
CCJ April 2017 figure £1k
Thanks,
JM
Sara (Debt Camel) says
re settling in full, read https://debtcamel.co.uk/dmp-partial-settlement/
But you will find it VERY hard to get a mortgage with a CCJ on your credit record, even a settled one.
Josh says
Hi,
I took out a loan with Barclays partner finance a few years ago and in 2017 defaulted on payments. At some point in 2017 I went on a DMP but after about 6 months payments were stopped at which point my remaining balance was around £260.
Fast forward to this year, I had a letter from Barclays a few months ago stating that they had closed my account. The balance on the letter said £0 and in the breakdown of payments it listed a credit for my full balance indicating that either someone had paid it (unlikely as no one knows my accounts), they had sold the debt on or they had decided to give up, clear my balance and closed the account.
I’ve not received any letters stating this has been sold on and no one is chasing me. I’ve checked my credit report and there have been no new accounts added (confirming it hasn’t been sold) and still shows as Barclays. The account however still shows as “In Default”.
Should this be shown as closed? If so then what are my best steps, do I report this to the credit agency or contact Barclays to get this corrected?
Sara (Debt Camel) says
Ask Barclays to correct it. There is obviously some risk that they may decide you still owe £260, but you can show the letter you had.
Mr L A M says
Hi,
I have a defaulted from March 2018 with BarclayCard. I believe this is an incorrect default as I only asked to make a late payment. They advised they will send details how to catch up on payments, I never received that letter and a few weeks after I was made aware of the default. At the time I had no idea what it meant and thought the account was just written off. I’m now in the process of applying for a new mortgage and this default is causing me a big problem as it is “unsettled”.
The question I have though is in the article above it mentions that they can refer to debt agencies after 5 years a few months. Is that a set rule or could they do it sooner? Is it also possible they might not even bother referring to a collection agency?
Sara (Debt Camel) says
oh dear. It is a shame you didn’t follow this up at the time. An unsettled default is a huge problem for a mortgage application.
The point in the above article wasn’t meant to say people are normally contacted after 5 years and a few months – it is to say that if you haven’t been contacted after 5 years you can’t assume you are safe.
Barclaycard can pass your debt to a debt collector or sell it at any point.
Laura says
Hi, I have old credit card debt where I have been paying £2 per month. The original default for these accounts have dropped off my credit record and I now have a really good score. What would happen if 1) I stopped paying the £2 or 2) I settled the accounts? Would they show back on my credit record and damage my now really good credit score?
Sara (Debt Camel) says
They won’t reappear on your credit record whatever you do.
But if you just stop paying, the creditor may go to court for a CCj which would be on your credit record for another six years…
Another option is to ask for a CCA agreement and only offer to settle if it can be found. See this https://debtcamel.co.uk/settlements-old-debts-cca/
Esther says
Hi I would really appreciate any good advice on this. My partner has a DMP through a debt charity that had been running since June 2015 with 4 defaulted accounts ( two defaulted in July 2015 and two in Jan 2016). We are desperate to get a joint mortgage and are on a super tight deadline here, otherwise it will be renting again for who knows how long…Have just been declined a mortgage with a high street lender due to his credit but also being told that the chances with the same lender would be increased if the DMP was closed. I have a funds to clear these debts in full and planning to contact the debt collecting agencies that are managing these defaulted accounts to do that. My question is whether there is any chance that they would cancel the default on his credit file if I settle the debt in full? (instead of DMP running for another 6 years) Or is that the case that if I pay these debts in full they will still keep those accounts in default for another year until it reaches 6 years? Any suggestions on how to improve his credit rating asap much appreciated. Many thanks
Sara (Debt Camel) says
but also being told that the chances with the same lender would be increased if the DMP was closed.
who is telling you this, a broker?
I should ask them to be specific – if you repay the debts in full what is the chance the mortgage will be approved now?
Otherwise surely your option is just to settle the debts and rent for another year until all the defaults go?
It is unlikely a lender will agree to remove a default if you offer to repay in full. And EXTREMELY unlikely that 4 lenders would all agree to do that.
Esther says
Thanks for your response Sara! Yes the broker is saying that. The amount outstanding on the DMP is quite high-Over £13K, we will still have enough for deposit and fees after paying this off. Just want to do this the best possible way to increase our chances if we reapply for the mortgage which will have to be in a very short time. Reading all your articles, lots of helpful information, thanks for that! Just very desperate to get this mortgage so hanging onto any good advice I can get.
Sara (Debt Camel) says
Who is the lender?
Esther says
The lender is Halifax and I’t a first mortgage for both of us.
Dean says
if the DMP is paid, and there are no other adverse items on the credit file then in February 2022 you will be able to get a high street mortgage off the peg. As long as bank statements don’t show payments to DMP and you are not borrowing from a lender that you defaulted with then they will never know. You will also be able to get a better mortgage rate and allow yourself to save a bigger deposit. Also you may be able to settle the DMP debts for a lot less that the 13k you owe, by offering F&F settlements. So that could be even more deposit money. I know its upsetting and frustrating but thats what i would do. Good luck
Esther says
Thanks Dean!
Sara (Debt Camel) says
I pretty much agree with Dean.
Unless you can get a commitment from Halifax that they will give you the loan if you settlement the DMP, I will be surprised if they change their mind.
Colleen says
Hi
My husband passed in 2017 and we had a joint overdraft with the NatWest for £2,800. I contacted the NatWest who said that I would have to pay it. I asked if I could be put on a repayment plan and they said they would have to send me default notices before a repayment plan could be put in place. In the end I was paying £40 per month. No default, at that time, was registered. Move on to February 2020 and I found a default notice on my account saying I had missed a payment. I contacted NatWest who after a while of investigations said they would put the date back to September 2017. This they have done but it still looks like I defaulted in February because in my payment history it has a D for Default for March April and May. Also my credit file has said I have made regular payments on my accounts for the last three months. This is not right I have not missed one payment on all of my accounts for well over three years. OK having a default is a fact of life but because NatWest did not initially put the default on in Sept 2017 my credit file does not look good. Also the payment history goes from Jan to May 2020 when I have made the agreed payments for nearly three years. I am also now paying the loan off at a reduced rate. Any help would be appreciated. Thank you
Sara (Debt Camel) says
I am also now paying the loan off at a reduced rate
do you mean the overdraft debt?
do you have other problem debts?
Chloe r says
Hi, wonder if anyone can advise –
I switched banks from Yorkshire bank to Santander – I thought the Yorkshire bank account was closed however before deleting the app I noticed that I was overdrawn by £24 due to a fee put on after the switch!
I immediately transferred £24 to the account and without thinking or checking the amount transferred straight back to my Santander account. I however didn’t think anything more of it. At the same time I was moving house and it wasn’t until 7 months later my old housemate presented me with a massive pile of letters from Yorkshire bank saying I still owed £24! I called Yorkshire bank who at first tried to tell me the owed ME £24 and I then questioned this further and they told me that I owed them – I explained the sutuisn and just paid it off. 4 months later I tried to buy a car to find my credit score had gone form very good to very poor and I had a detailed account with Yorkshire bank! I rang the bank and explained all this and logged it as a complaint but they won’t remove the default as it’s not an ‘error’ I’d there anything I can do?? I’m so ready to buy a house and feel this is now all ruined over something I don’t have control of! As far as I was aware I paid the £24 off straight away ! I feel totally out of my depth and anxious.
Sara (Debt Camel) says
so what had happened – did your extra £24 payment not go through?
how long ago was this?
Chloe says
Hi – because my account had switched when I transferred the £24 it bounced back to my current account. I send Yb the bank statement clearly stating I did do this but they still won’t remove it. I didn’t even check and didn’t notice it had bounced back until I discovered all this was going on. I have taken this to the financial ombudsman And hoping they can help me.
Sara (Debt Camel) says
ok, well I hope the Ombudsman does help in that situation as you clearly tried to put it right.
Abdul says
Hi,
I have 4 defaults on my credit report and I have been making payments consistently for just over a year now. I started with 6, 2 now paid off. The default date is noted as 2 June 2014 for all 6 defaults. When do I expect these defaults to come off my credit record?
Thanks
Sara (Debt Camel) says
They should have gone by now :)
Make sure you look at a report which is accurate in realtime. A lot of the credit reports only update once a week or once a month.
You do know you still have to pay even though they aren’t on your credit record?
Aqeela says
Hi,
I have 4 defaults on my account. Two show up as satisfied, but the other two don’t (both with Virgin Media), even though I know I definitely paid them, especially as one is from Feb 2020. I have spoken to Virgin and they have no idea what I’m talking about and can’t even find one of my accounts (it’s from 2016). The recent account default is showing up as paid on their side. What do I do in this situation? Do the defaults need to say “satisfied”? I’m trying to build my credit rating up a bit more as I’m hoping to apply for a mortgage at some point soon
Sara (Debt Camel) says
you cant get this sort of problem resolved on the phone. Send them a written complaint (online form, email or letter) with a screenshot of your credit report (probably can’t do that in an online form but you can say you can send it if they want). Ask for the 2016 debt to be deleted if they have no record of it.
This won’t increase your credit score but it looks much better to lenders especially mortgage lenders. But if the last default was recent you may struggle for a few years to get a mortgage at an OK rate.