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.
This also applies to CCJs
Exactly the same applies to CCJs. If you pay them in the first month the CCJ will drop off completely. But after that if you repay the CCJ and get it marked as satisfied, your credit score will not increase at all.
Again there are good reasons to repay a CCJ – you won’t get hassle from bailiffs or money being taken from your wages. But you are stuck with the bad effect on your credit score for 6 years.
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.
Will a consolidation loan help?
If you have poor credit, it is very rare for a consolidation loan to help.
Using it to repay some defaulted debts or debts with payment arrangements is not going to improve your score. And the loan is going to be expensive – it’s usually better to get a payment arrangement to repay defaulted debts as then no more interest is going to be added.
And getting a guarantor loan to consolidate debt can be a major problem – if you run into difficulty you will then be desperate to protect your guarantor.
It’s better to talk to a debt adviser before taking a consolidation loan.
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.
Consolidating with bad credit?
Can you get a mortgage with your debts?
FAQs on statute barred debt
Maria Francesca says
Hi,
I became in arrears with a bank loan around 2008. The account was recorded as a default I believe. Since this date I have been making regular payments. I have kept to my payments and never missed a payment. The debt was passed to a credit management company back in 2008. in March 2017 I telephoned to increase my payments as I am in a better financial situation. When I have checked this month my credit score has declined significantly. I am unclear why this would be the case as this is not a new loan/default as the original default was over 9 years ago. I have actually paid the defaulted account in full today so there are no outstanding debts to this loan from 2/05/2017. Is there any reason my credit rating would decline so significantly as prior to increasing my payments I had a reasonable/fair credit rating. I don’t know what to do next or who to contact as I’m worried they have classed it as a new defaulted account.
Sara (Debt Camel) says
What does your credit record currently show for this debt?
Maria Francesca says
It is now showing as a new account and new default/arrears I think. When I phoned the credit management company in march shortly after that (2-3 days later) everything vanished from their records. Now it’s been logged as this and is back on my report.
Thanks
Lisa V says
Once you make full payments off of your debt and it is cleared from credit rating and no longer shows as a default. If you apply for a mortgage, will creditors be able to see that you once had defaults on your account or after the 6 years they completely get wiped clear and never get seen by anyone. ??
Sara (Debt Camel) says
After the six years, a mortgage lender will only be able to see an old default from their own internal records, for example if you defaulted to Barclaycard and then applied to Barclays for a mortgage.
Adrian says
I have several defaulted credit card accounts after I was out of work for a long time and then seriously ill. I have perfectly paid arrangements on all of them but they are over six years old now, and i guess, about to drop of the credit register.
Once they do, if i stop paying can the credit companies still chase me?
Sara (Debt Camel) says
Yes, see https://debtcamel.co.uk/paying-old-debt/.
Paul H says
Hi,
I have two current defaults, one for £1200 and one for £5k, would it help my credit score if I tried to pay these debts back quicker? I am currently on a DMP with Stepchange, but not being able to buy anything on HP as I pay a considerable amount on my DMP each month worries me. I am trying to look towards the future and plan for any changes.
Many Thanks
Paul
Sara (Debt Camel) says
No, repaying these two debts faster won’t improve your credit score. How much longer will your DMP last?
Paul H says
Hi Sara,
I will be on my DMP up until March 2019, I have done quite well with it to pay off £12k in two and a half years, but ideally just wanted my credit score to improve as soon as possible, without waiting until 2021, as the defaults were added late 2015.I was going to look at trying to overpay the monthly payment, do you recommend it?
Thanks
Paul
Marie says
Hey there!
Im not sure what to do. I have 5 defaults on my account. Earliest one was 2013 the rest are spread from 2014 & 2016. The balance is around 11k.
I now have the money to pay these off in full, however is it worth it do you think? I have had arrangements with debt companies to pay £10 per month each debt for the past year or so. Should I just keep doing that until they disappear from my file?
Im looking to buy a villa in Spain or here but to do that my credit rating needs to be good. So will paying these off in full now increase my chances of being approved for a mortgage this year? Or should I just not waste my money and keep saving & pay £50 per month for the next 10 years?
Sara (Debt Camel) says
Repaying these wont directly improve your credit score but until they are settled you are very unlikely to get a mortgage, see https://debtcamel.co.uk/mortgage-recent-defaults/.
jenna whitmore says
Hi Sara,
I am wondering if you can help?
I have just looked at my noddle report and i have Cabot finance listed as a default every month from Ja while ago.
This unfortunatly went through to a CCJ – at the time i didnt know this had happened as all post went to a previous address which has just been a disaster for me. I am now payin this of £10 through an attachment of earnings what i want to know is why Cabot are still listing this as default if i am paying this back through a CCJ.
Will this continue to show untill the debt is settled?
If this is the case its going to show on my credit report for many years to come.
Thanks,
Jenna
Sara (Debt Camel) says
After a debt has defaulted it will continue to be marked as in default every month until it is settled, BUT when the default is 6 years old, the whole debt will be deleted from your credit record, whether it is settled or not.
The CCJ itself will be on your file for 6 years. CCJs are much worse for your credit score than defaults, so in practice, the default on this debts isn’t that important.
annemarie says
I paid 2 defaulted debts in full (approx £500) recently and this has negatively effected my credit score. It has gone down by 6 points! will this recover? I really need to build my credit and I was hoping that this would help. The debt was from approx 8 years ago and I hadn’t made any payments for about 7 years. I have been declined for a credit card so I can’t think of any other way to improve my credit. Any advice please?
Sara (Debt Camel) says
Paying a defaulted debt in itself does not help your credit score as the above article says. But it will make some lenders more likely to give you credit.
6 points is a tiny amount, credit scores are complicated calculations, probably something else on your record caused this small drop.
If you hadn’t mad any payments for 7 years, you should ask for the default date to be backdated or for a default to be added, see https://debtcamel.co.uk/debt-default-date/
Gill says
Can you help me? I’ve never missed a loan repayment, never missed a mortgage payment in 13 years, occasionally forgot to pay a credit card in time, but last month I found my credit score was awful and it was because of a ccj that I never knew I had…turns out it was a private parking ticket which I appealed in writing and then heard nothing back from them but apparently it went to court anyway and. Jan 16….the ccj was sent to an old address in my maiden name and that’s why it wasn’t redirected to me….it’s for £170 but from what I’ve read it doesn’t matter whether i now pay it or not as my credit rating will still be affected by the ccj being there for another 5 years anyway, is that right?
Sara (Debt Camel) says
You may have good grounds for the CCJ to be “set aside”, I suggest you discuss this with National Debtline see https://debtcamel.co.uk/more-information/where-to-get-help/ for how to contact them.
If you don’t then you are right that paying the CCJ won’t improve your credit rating, but it will stop bailiffs arriving, see https://debtcamel.co.uk/debt-stop-bailiffs/.
Julie Watts says
I have finished my Dmp this year and all my debts are paid. On checking my credit report I was surprised to see a default from 2012 still showing a balance of £65. I realise this will drop off my file next year but do not understand why it still shows a balance of £65 when I made all payments required with my Debt Management plan.
All my other accounts are showing as satisfied.
Sara (Debt Camel) says
I suggest you ask your DMP firm to confirm that that debt was cleared, then go back to the creditor and ask them to mark the debt as satisfied with zero owing.
It won’t change your credit score, but it will prevent the creditor popping up in a few months and demanding you pay them or they will go to court for a CCJ.
Stewart says
Hi, I have a delinquent account showing on Experian which has not been updated since early November 2015. I have several other accounts in default; however, as they are over 6 years old they no longer show on the credit report.
I have a DMP, which is coming to an end within the next 12 months, at which point I will have no further debt.
My question is, I am expecting to come into enough money shortly to pay off the delinquent debt, if I do so, is it likely that my rating will improve? what will the status of the currently delinquent debt be once I have repaid it?
Sara (Debt Camel) says
Are the “delinquent debt” showing on Experian and the ones that have dropped off your credit record included in your DMP?
Stewart says
yes, all my debts are part of the DMP. all the others were defaulted more than 6 years ago and have now dropped off the credit report. The only one remaining on there is the delinquent account which has not been updated since 2015.
Sara (Debt Camel) says
If you pay off this non-defaulted debt it will show on your credit record as Settled with zero owing. This won’t improve your credit score immediately, although over time the arrears markers will get older and affect your score less. The debt will disappear 6 years after the settlement date.
You could ask for a default date to be added back when all the other accounts were defaulted, see https://debtcamel.co.uk/debt-default-date/
Bob says
Hi,
I am planning (as everyone else here) to get out of my DMP and pay off defaulted debt in order to get a mortgage in a years time. Change of circumstances and some unexpected help.
However, one of the debts in the DMP has not defaulted, I am assuming this is because I am meeting the minimum payments (6K credit card and dare not ask in case it is a mistake), this debt has been bought by a debt company, but all my payments are showing green ticks.
So, should I pay off this debt, or is it actually building my credit profile up? I guess there is a risk they suddenly add a default, and I would have to fight to get the default put back. They do send me periodic notices that the debt is due in full but are happy keeping the arrangement as agreed with the previous debtor.
There is also a default showing on one of the other debts probably 6 months lather than strictly should. Given that the default will be in the 2-4 year window regardless, is it even worth trying to get it adjusted?
Is it also worth paying them off in full, speaking to some of the debtors, they offered to accept a lesser amount to clear.
Thank you for taking the time to help
Sara (Debt Camel) says
If there are no arrears and no default on this debt, then it is helping your credit record. When you pay it off, it should show as zero owing and Settled (not Satisfied, that would be when there was a default.) They shouldn’t add a default date if you pay it off… and you can object if they do… but it’s really hard to know what will happen as what is happening at the moment doesn’t sound right! If I had to guess, I would say that if you pay it off in full a default is unlikely to be added.
The problem with continuing with the agreement is what if they sell the debt to someone else? Or review it and then add arrears/default? As they aren’t doing this right at the moment, it’s hard to tell what they could choose to do. If you want a mortgage, this could be nerve-wracking.
A default that is wrong by 6 months – it’s doubtful if it is worth trying to correct that but I suppose there is no harm in trying.
It’s a hard call to say whether to repay these debts in full or not, see this other post which looks at the issue: https://debtcamel.co.uk/dmp-partial-settlement/.
Bob says
Thank you for the response.
Decided to pay everything off in full – the credit score is most important.
Paddy says
Hi
Ive 2 questions i’d love your help with….
I’ve currently 5 defaulted accounts on my credit file, However one of these came from the Debt recovery company (Link) that was put in charge of my Barclaycard credit card account, however Barclaycard has the same account already defaulted on my account. Seems very unfair the same debt has got me 2 defaults. Is there anything i can do about this?
My second question, Having checked my credit file, and have noticed that Halifax has marked my (defaulted) current account as settled even though its in debt for over £6k! It defaulted 3 years ago and 1 year ago appeared as settled. On my Equifax report it states the defaulted amount however it does not include the amount in in the Total owed. Have Halifax written this debt off, surely im missing something?
Sara (Debt Camel) says
“Seems very unfair the same debt has got me 2 defaults. Is there anything i can do about this?” Barclaycard should have marked the debt as settled with zero owing – if they have, then this is normal and the second default doesn’t harm your credit score.
“Halifax has marked my (defaulted) current account as settled even though its in debt for over £6k!” No it hasn’t been written off. It has been sold to a debt collector. Check your credit records with all three CRAs, see https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to do this for free. If you can’t see an entry from a debt collector it will probably appear soon :(
Lvr82 says
Hi,
As with everyone else on here, we are all still trying dig ourselves out of a hole our youthful self’s put us in.
Anyhow…. I’ve got a ccj that will expire in January 19 for a debt I defaulted on in 2008. It’s for about 2k. Am I right in thinking that no matter what happens this will be removed from my file at this point and will never be reinstated even if the new owner of the debt tries to go back to the courts to re-enforce it. Also a new ccj can’t be issued for the same debt and all correspondence sent to an old address. Even though a simple check will give them my current address for the past 3 years.
Its the last of my debts on my file to remain unsatisfied and I’m hesitant to go chasing to pay it when they’ve not once contacted me since applying for it.
Sara (Debt Camel) says
Yes it will drop off you file and it will never reappear. And a second CCJ can’t be obtained for the same debt. Make sure you keep the CCJ paperwork for at least another 6 years though so that if the creditor does try to get a new CCJ you have the evidence to hand to prove there has already been one.
The CCJ doesn’t actually expire after 6 years, but if the creditor tries to enforce it after that contact National Debtline.
Vic says
Hi- I’ve recently been offered a new role by a none financial institution- I have been told the will do a credit check as part of the pre – employment background check. Am I correct in thinking that they will only be able to see public record info?
So, CCJ, IVA electoral role etc? Or are they able to see defaults as well?
Sara (Debt Camel) says
Most non financial employers will only do a background check that covers public information such as CCJs and IVAs as you say.
DB says
Just to say, this is the most informative blog/site for people wanting to know about defaults and other adverse credit.
My scenario is this, I have a total of 6 defaults, all relating to O2 (telecommunications).
Everyone of them has been paid and marked as satisfied/settled.
Age of defaults vary but are all over 3 years from date of default and 2 years since all settled.
All my credit cards paid off within the last 2 months and by August this year there will be my overdraft and loan which will also be paid off. I am expecting my credit score to increase based on my overall low usage of available credit limit.
I am just looking for a bit of guidance on applying for a mortgage with Halifax with telecommunication defaults over 2 years old but with a very good credit score. Am i wasting my time or is it true what is being talked about……telecommunication defaults are much more lenient or will they just be tarnished with same ‘you cant manage money’ brush on AIP stage?
Sara (Debt Camel) says
Repaying the loan and getting out of your overdraft will help a mortgage application. And with the defaults all being over three years old and settled a while ago you should have a good chance of a mortgage but go through a broker, not direct to a lender.
PS I hope you haven’t closed the credit cards. Leave them open. And use one every month and repay it in full every month is the best way to improve your credit score.
Paul says
Hi,
I mentioned before that I have two outstanding defaults, and I am currently on a DMP.Is it advisable to overpay the defaults to try and settle these as quickly as possible? Is it also advisable to take out a pre-approved credit builder credit card to try and rebuild some credit, by spending very little on it, and repaying it immediately? The problem I have is that the defaults have been on my credit file for almost 2 years,but I have a very poor credit rating and cannot buy anything which would cost more than any available savings? For example,a television?
Sara (Debt Camel) says
Repaying the defaults won’t actually improve your creditor score, but it is likely to make it easier for other people to lend to you.
You said you were paying a lot to your DMP. So how realistic is it to increase this? How much extra could you pay a month?
A credit builder card is not going to help your creditor score whilst you are in a DMP! It would be a waste of money
Paul says
Hi Sara,
The DMP was originally £334 a month for the first year, I then increased it to £443 a month,the only problem I have is that I currently have two defaults,one of which is just over £1000,but the other one is £4400.I can pay additional on top but I don’t really want to commit to paying extra as I will have to pay this every month which I may not always be able to.But being unavailable to get anything on credit is causing me a few problems in buying anything in the future?
Sara (Debt Camel) says
Yes, you don’t really want to push your monthly payments up to a level you can’t make every month. Especially as your DMP isn’t going to last for too long anyway.
I suggest a good way forward is for you to save up the “extra” amounts you have some months. Then you can use those to buy a TV or whatever – avoiding any need for credit.
Paul Hedge says
Yeah I totally understand,it’s just for the urgent things that you need quickly which are more difficult.Like if anything happened to my car and needed to get a new one etc.
Sara (Debt Camel) says
There isn’t an answer to that. You could stop paying your DMP at all for a couple of months, but it’s still not instant money. But there are no ways that will rapidly improve your credit score.
Chloe McCreadie says
Hi there, this site so helpful thank you so much. I have a debt with a default date of 6th July 2011. The default balance is £1700, but the full amount is approx £4K. I’ve been offered a partial settlement of approx £3k.
I’m in the process of trying to get a mortgage, I’m really lucky to have a large deposit (from my parents). At the moment my salary is very low so I just pay about £5 per month towards the debt. My parents have offered to clear the debt either fully or partially if it will help me get a mortgage.
As this is about to drop off my credit file should I bother with the partial/settlement? Should I just continue with the low payments to avoid a ccj?
My parents have worked so hard for their money and I’m extremely grateful for their help, I want to put their money to the best possible use.
Thanks in advance for your reply x
Sara (Debt Camel) says
You have to clear this debt, fully or partially before applying for a mortgage. In your situation I would recommend partially as it’s just about to go from your record, see https://debtcamel.co.uk/dmp-partial-settlement/ for details.
The debt collector may well accept £2000 if you explain its being offered by your parents.
Can I just check that you are sure you can afford a mortgage if you are on a low income? Owning a house comes with al sorts of extra costs that you don’t get if you are renting… also are you sure you parents really don’t need the money?
Paul Hedge says
Can I just ask a question with regards to full and partial settlements? Will there be any difference to my credit file in regards to a defaulted account? I’ve got two defaulted accounts and I just wondered if they have a different effect on your credit file if you make a partial settlement?
Sara (Debt Camel) says
A partial settlement is a flag on the debt record. It doesn’t affect your credit score. Some lenders take account of these flags, many do not.
Chloe McCreadie says
Thanks for your reply. Why does the debt need to be cleared before applying for a mortgage? I know I have to continue repaying it but as it will drop from the credit file very soon why does it need to be fully/partially cleared?
I’m applying for the mortgage in just my name as my husband is a student, so the loan repayments can come from his account so they won’t show up on my outgoings when I submit my bank statements.
I’m aiming for a house worth approx £130k with a £100k deposit, my rent is currently £550 which I’ve paid every month no problem, so I can definitely afford a £30k mortgage.
Thanks so much for your continuing help.
Sara (Debt Camel) says
You are likely to be asked about your debts and repayments as part of the mortgage application. It’s fraud to not mention one, even if it isn’t on your credit record and it isn’t showing on your bank statements.
But with a deposit that big, it’s an easy decision – just settle the debt!
Chloe McCreadie says
I understand why I have to keep repaying the debt, and acknowledge it in a mortgage application, but I still don’t understand why the debt needs to be partially/fully cleared before making the application? I’d rather continue to pay back the debt myself rather than using the deposit money from my parents.
Sara (Debt Camel) says
Because most mortgage lenders would rather offer a mortgage to someone who has resolved their debt problems. Your current debt collector may be perfectly happy getting £15 a month – but it could be sold to a debt collector who wants more. Or who sees you have a house, they may decide to go to court for a CCJ and get a charge on your house…
You will have a huge deposit. It may be there is a mortgage lender who won’t care in that situation, you could go to a broker and ask. I am just saying what lenders normally do.
Chloe McCreadie says
Ah ok I see what you’re saying. Thanks for such a prompt reply I really appreciate it x
Chloe McCreadie says
It was originally a loan opened in 2007 from HSBC for about £8k, I was making regular payments for a few years then when I was between jobs I arranged to take a payment break, when I got a new job I tried to contact them to continue making payments but couldn’t get through, and because I was young and stupid I didn’t pursue it and it took years for the company to contact me. The default date was 2011 which is why it’s now left my credit file.
Sara (Debt Camel) says
When did you last make a payment?
Chloe McCreadie says
Last month for £1, that’s been the arrangement for about 8/9 months as I was out of work, I have had a job since January but knew I would be trying to get a mortgage so have been paying off credit cards etc.
Chloe McCreadie says
So do you think a 40% reduction is the best I can offer?
Sara (Debt Camel) says
You can offer what you want, but it’s always hard to tell what may be accepted. Have you asked the debt collector to produce the CCA agreement for the debt? If they can’t the debt is unenforceable in court and it may be much easier to get them to accept a very low offer. more info and template letters here: https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx
barry weston says
So it’s past 6 years for the date of my un settled ccj 17.6.11. When will this drop off my file?
Sara (Debt Camel) says
Are you looking at a “free” credit record report? If you are, most of them are snapshots taken every 30 days. The CCJ may well have gone already…
Andrew scott says
I have £1000 default balance with Vodafone. Is there any way they can take the default off my credit file if I repay it? Also is it true that debt get written off if it is not paid in 4 years? If so whats the point in paying Vodafone back if I already have a default that takes 6 years to go away.
Sara (Debt Camel) says
“I have £1000 default balance with Vodafone. Is there any way they can take the default off my credit file if I repay it?” Well they could do but it’s highly unlikely.
“Also is it true that debt get written off if it is not paid in 4 years?” No, that is nonsense. Debts get statute barred after 6 years, but a creditor is likely to have gone to court for a CCJ before that point. There were 300,000 CCJs in the first three months of 2017…
“whats the point in paying Vodafone back if I already have a default that takes 6 years to go away.” Because if you don’t they will sell the debt to a debt collector who will take you to court in a few years for a CCJ, wrecking your credit record for another 6 years. And if you want a mortgage or a remortgage, you need to have settled defaults, not just ignored them.
Andrew scott says
Ok thanks. Can company’s take defaults off at their own will?
Sara (Debt Camel) says
Well they have control over the data so it’s possible. But there needs to be a reason why they should think that a default shouldn’t have been added. They aren’t going to agree to do this if you offer to pay the debt!
Lauren says
My boyfriend and I want a Help to buy mortgage. Although, he has ran into a few credit score issues on the way. His score is not rising and should be at 760 in the next month (not looking to buy next month, but it’s going up). We were told that a note saying he used a DMP is all that’s impacting us getting help to buy now…
Can these be removed? The note is truthful, can we negotiate with the creditor?
Sara (Debt Camel) says
Is he still in a DMP? If not, when were the loans settled?
Lauren says
He is not still in a DMP. The loans were paid off in April 2016.
Sara (Debt Camel) says
Are you talking to a broker? I would have thought that with your DMP having finished over a year ago he would be OK for a mortgage.
Lauren says
The broker originally said we couldn’t get a help to buy mortgage until the DMP had been paid off for 3 years.
Sara (Debt Camel) says
Try another broker.
Jeff says
I have 3 defaults all of which will fall off in 2018.
I have a payment arrangement with all of these lenders. My question is if I continue to make the agreed payment until they fall off my credit report then stop making payments what happens then?
Sara (Debt Camel) says
This article https://debtcamel.co.uk/paying-old-debt/ looks at your situation.
Dan says
Hello,
I had an account default with Halifax (mid-2013). This was then sold on to Lowell which I settled at the end of 2015. Is it correct that both should show as default accounts on my credit report? As in, it shows as having 2 default accounts, 1 for Halifax and 1 for Lowell, whereas technically it is only 1 account.
Many thanks
Sara (Debt Camel) says
That’s normal. When the account was sold on. the balance would have been set to zero. It is only counted as one default on your credit score.
Dan says
That is good news! Thanks for your help.
Ashley says
A few years ago being young and stupid i got myself into quite a lot of debt (12k) i took a loan out for that amount to have one payment every month going out. A couple of months later i lost my job, and stupidly never really got around to paying it back. Fast forward a few years, I’ve got a young family, where everything’s paid on time. I don’t get into any debt, only a credit card which is cleared every month to boost my score.
My parents have offered to put down a deposit on a house for me. If i check my credit history on Equifax and Experian it comes up as excellent as it doesn’t show the debt, but however if i check it on noddle/clearscore it shows that i defaulted oct 2011 and isn’t satisfied, though its due to go in September/October time
The house i want to buy is off my grandad so urgency’s the key here as he cant wait much longer. I can afford the mortgage repayments as they’ll be low and ill have a bit spare to pay off the debt over time.
Whats my best play here?? Even though it doesn’t show on the main 2 credit agency’s, am i best to apply for a mortgage with one that doesn’t use Clearscore, and then if/when they do catch up with me worry about it then?? They haven’t tried to contact me at all in the past few years, and i think they’ve got my exes parents house as the address the debt is registered to.
Thank you for your help in advance
Ash
Sara (Debt Camel) says
Most mortgage companies will check all three credit reference agencies. The debt will disappear in Oct 2017 so that’s not that long to wait, would your granddad mind a completion in late November/ early December?
Philippa says
Hi I have a default on my credit report from Lowell, the original default date was October 2012, I have been making payments every month via direct debit to pay of the debt but my credit report shows as defaulting every month, shouldn’t this show that I am up to date with payments and then the default will be removed from my account in 2018? Or does this mean that the once the debt is settled the final payment date will be the new default and this will stay on my account for another 6 years?
Sara (Debt Camel) says
Once a default had been added, your account will always be marked as in default each month. That’s the way it works. But the only default that matters is the first one. The record will drop off your credit report in October 2018.
John Allen says
Hi,
I owed money to British Gas, which was chased via a debt collector “Wescot”. The amount outstanding was £418, but I was offered a “Settlement offer” of £292.60 which I paid on the same day (07/02/2016). The following month the account appeared as a “DF” (default) on my credit record and still exists on their today. Is that legal?
Sara (Debt Camel) says
You could complain that it is unfair to add a default after it was settled, but technically it probably is correct.
Rae says
Hi
Can you offer me advice please.
I had a defaulted account that has now as of 18th August been on my file for 6 years. It’s now moved to closed accounts (on clearscore) but is showing the amount that it was closed at. Will this effect my credit score and me getting a mortgage? I thought after the 6 years it would disappear of my file.
Sara (Debt Camel) says
Are you making payments to this account at the moment? If not, when did you last make a payment?
Rae says
I can’t remember the last payment sorry. The default is over 6 years old and has moved to closed account. I thought it would disappear completely off my credit file. I do understand the debt is still a debt though and I would need to pay it but didn’t expect to see it at all.
Sara (Debt Camel) says
Well when you made the last payments matters… if it was less than 6 years ago the debt can’t be statute barred.
In which case it would probably be worth asking for a CCA agreement (see https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx which has a template letter and note you have to pay £1 for this) if the original debt was a loan or credit/store/catalogue account – if the debt collector can’t produce it, then it can’t be enforced in court and you don’t have to pay it.
If they can produce the CCA agreement, then I suggest offering a partial settlement to clear the debt. See https://debtcamel.co.uk/debt-options/less-common/full-final/.
If it is 6 years since the default date, the debt should NOT be showing on your credit report. I suggest you ask ClearScore why it is.
Rae says
Thank you for your help.
I do think it was over 6 years ago. I will ask clearscore why the account is now showing in closed accounts with the outstanding amount. As I’m guessing this will prevent me from getting a mortgage in the future?
Pam says
I have a old shop direct debt, no signed credit agreement, it’s due to be 6 years February 2018, will this disappear . They have constantly moved the dates and have sent numerous emails , letters phone calls but they won’t change it.
Should I pay this off in full total £2995 default total £1995. They just keep sending me letters stating there is no signed cca available but I still need to pay, please help. Will it disappear in Feb? Should I try and find the money to pay it ?
Sara (Debt Camel) says
If the debt collector has said they cannot produce the CCA then they can’t take you to court. The debt will disappear from your credit records 6 years after the default date – I assume that is February 2018. They should not move this date so it is later.
There is no reason to pay this debt. It legally still exists, but so what?
I suggest you write to the creditor saying that you do not intend to pay the debt as it is unenforceable and ask for all future communications about the debt to be in writing, not by phone. If they persist in phoning, put in a formal complaint to them in writing, eg by email.
I suggest you get a file for this debt. Keep the letter from the debt collector saying they cannot produce the CCA. Keep subsequent letters they are sending you but you don’t need to bother to reply to them. Keep a copy of your credit report which shows what the default date currently is.
Pam says
So will I be able to apply for a mortgage after February 2018 or will it still stop me
Sara (Debt Camel) says
Yes. No one be able to see the old debt.
Ash says
Hi can someone help!
I was late with 1 payment to 118. I set up an arrangment to pay over the next 3months I done this and kept in correspondence with any issue I had my Loan was actually repaid early . It’s all been settled and now they have added a default to my credit score can they do this they agreed to a payment arrangement and the late payment was less that 2 months no where near 3-6 as stated on most sites?
Thanks
Sara (Debt Camel) says
Hi Ash, I think you should ask them to delete the default, see https://debtcamel.co.uk/debt-default-date/ for how to do this.
chris says
i have a delinquent/default debt of £111 with orange/EE i only discovered then when i was declined a mortgage and checked my credit report.
i wasn’t aware of a final bill that hadn’t been paid. i wasn’t even aware i owed anything as i thought was finished with there services. A bill for £9.
i have since been on the phone and have been told by orange/EE that my score to them is still good and i have paid off final bill but i don’t understand why or where or how to pay this delinquent/ default debt.
any advice would be appreciated
many thanks
chris
Sara (Debt Camel) says
It sounds as though you should put in a written complaint – not by phone – to orange saying that you want them to remove the default, you were never told there was any money owing and on the phone just now you have been told that you don’t owe them any money.
Elizabeth says
Hi, I was just wondering if you could help clarify something. I have a debt with shop direct, it defaulted in 2010 and I set up a token payment plan with them to pay back 1 pound a month which iam still paying. Last year the default dropped off my credit report and my credit score improved drastically. The debt isn’t showing as an open or closed account on noddle of clear score – it isn’t showing at all.
The debtors have recently wrote to me offering a 70% discount to pay the debt off. My question is will this somehow ‘wake’ the debt up and it will it go back on my credit report once it’s partially satisfied. As my credit score is good at the minute I’m worried about doing anything to negatively affect it, however I also want to take advantage of a good offer to get rid of the debt as one day in the future I would like to get a mortgage.
Thanks for your help
Sara (Debt Camel) says
Accepting their full & final settlement offer will not cause the debt to reappear, see https://debtcamel.co.uk/ff-credit-record/
Can I ask when you opened this account, was it a long while before 2010? And how large is the current balance?
elizabeth says
Hi thanks for your reply. It was opened in 2008, I can’t remember the exact date. And it defaulted in 2010. The current balance is 893 and they are offering a final payment of 267. do you think it’s a good deal worth taking? Thanks that page is very helpful!
Sara (Debt Camel) says
It’s definitely good to get a debt all sorted. But can you afford £283? A big discount is no god if you can’t manage that without going short and borrowing more, on which you will be paying interest.
Christian Smith says
Hello,
I have two defaults with Capital One – £389 (06/15) & £686 (03/14).
I have a good deposit and am looking to apply for a mortgage and wanted to know am I best leaving these unsettled, paying in full or making a settlement offer?
I appreciate it will not help my credit rating but will a lender look more favourably if defaults are satisfied?
Many thanks
Sara (Debt Camel) says
You won’t get a mortgage until these are settled.
These are small amounts of money – I suggest settling in full asap. A partial settlement won’t save you much money and a few mortgage lenders may not like it – doesn’t really seem worth it for a very small saving.
Even when you have done this, most mortgage lenders will not consider an application for another 12 months – by that time the defaults will be over 3 years old and you will have been problem free for 12 months.
Collin says
Hi
I have a default account of £568 which I was not aware of upon contacting to the company the are asking me to pay £112 to settle the account will this show on experian report as settled n closed after £112 paid.
Thanks
Collin
Sara (Debt Camel) says
Is it showing in Experian at the moment? Do you agree you owe £568 and they have offered a disacount to settle?
Danny says
I have 2 defaults on my account an 1 ccj all settled.
1 default come off this October the other 2 will come off in 2020.
1 default has peen paid off for years the other 2 I paid off last month( I did not know I had them)
Since paying them off my credit score dropped to 264 do you know why that would be?
Everything others than these 3 accounts is paid on time and has been for years now.
I’m looking to buy a house in the next 6 months dose this mean I stand no chance of getting a mortgage?
Sara (Debt Camel) says
Your credit score hasn’t dropped because you have paid these debts – something else has happened. Perhaps you have closed an old account? A loan which was repaid on time 6 years ago dropped off your credit record? Are your credit card utilisation limits high – see https://debtcamel.co.uk/credit-card-danger-point/?
You have very little chance of getting a mortgage with a CCJ on your file – especially as it has only just been repaid. I suggest you need to wait for 12 months and at that point talk to a broker. It may however be better to wait until 2020 when the CCJ has vanished – you will be able to get a much better deal on your mortgage.
Rebecca says
Hi. I have 5 defaults on my credit file, all relating to pay day loans from 2 debt collection agencies. Default dates ranging over 2013/2014 for loans I had 2009-2011. The pay day loans themselves are just showing as settled closed accounts. The defaults are purely from the collection agencies… but there are totaling nearly 2 grand and I only ever took out around £700 a month which I was paying back and borrowing again for about 2 years. I should never have been offered more loans and was in too much of a mess to know what to do at the time. There was no help for me. What can I do now? My situation is completely different now, I looked into reclaiming the thousands I did repay but was advised that it would just set the debt collectors after me again? How can I fight this?, I understand that I probably still owed those companies a few hundred quid when I closed the bank account they were linked to, which I take responsibility for but I had no idea what I was getting in to at the time. Surely if I owed a company £150 for example then that’s what I owe them… How can it have trebled to £600+ in the few months before they sold on the debt. Is there anything I can do about the fact I was not in a position to be given these loans to begin without landing myself in the firing line of debt collectors and that the defaults are for more that double anything I ever borrowed? Also does it mean that even though they are closed and defaulted that they might still try and give me a CCJ?
Sara (Debt Camel) says
“loans I had 2009-2011” do you know the dates of these loans? have you ever made any payments to them?
Frazer says
Hi,
I recently tried applying for a mortgage and realised that I had an old student account in arrears since January (£250 inc charges). Natwest issued this notice in January and we asked for further information. Long story short the debt has now been settled and my account will show default in Jan, Feb, and March. Will my credit report improve gradually any time soon or will it be stuck where it is for the time being? I currently have a mortgage but had been hoping to remortgage to something a little more affordable but with credit score at it’;s current level will be unlikely I will be accepted for a new mortgage.
Sara (Debt Camel) says
Is it correct that that you stopped paying the debt in January? Was this your fault?
Frazer says
Technically yes. It was an account I hadn’t used sine 2013 and had an interest free overdraft facility, unfortunately I was unaware that there was a sum of £40 still in the overdraft which had not been paid off. So due to the fact I hadn’t used the account in over two years when I moved home I forgot to update my address with Natwest. They have informed me over the last few days that the account changed to a regular account in August last year and interest was then applied to the £44, since I knew nothing about the account it then went into default in January when I received a debt collection notice form Wescot. Natwest claim they have records informing me of my default but due to a change of address I have no proof of this, however they are claiming I did not maintain the account correctly.
Sara (Debt Camel) says
have you had any other products with NatWest (or RBS?) since (credit card? loan? mortgage?) where they have your correct address? Did they have an email address for you? I assume you have repaid the amount immediately.
The best thing at the moment is tio write and complaint saying you feel you have been treated unreasonably. this is a very small amount of money and a simple oversight – you paid it off when told. It is not fair that your credit record should be ao adversely affected for something that was not you fault. the more you can do to suggest that they could have contacted you but didn’t the better the argument.
Otherwise your credit record is not going to improve at all for a couple of years, see https://debtcamel.co.uk/credit-score-change/ and will remain poor for a further two years after that.
You could add a notice of correction to your credit record, see https://debtcamel.co.uk/notice-correction-credit-record/ but that may not make a difference. Your best chance of a remortgage at a good rate is with your current lender.
Frazer says
No I have no other accounts with them but they do have my up to date email address and did so at the time of account change. I have paid the debt off and have raised a complaint with them on the matter. They are currently willing to back date it to March but we are hoping this will be removed entirely from my file.
Sara (Debt Camel) says
If they had your email address and never contacted you this is an excellent reason for a formal complaint.
Raa says
Hi. Thanks for this webisite.
I’ve just checked my credit report today. In the past ie last yr when I checked my credit score was really good. Today I checked and it is now rated as “poor”. I can see that in Sept they added a default from Hoist Holdings 2 Ltd. I think this is from a barclays credit card I had in university (over 8 yrs ago and which I haven’t used since). I haven’t made any payments on it for the past 7 yrs I’m sure. 2 questions:
1) If the default was from several yrs ago, how come it’s only showing now and can I get them to backdate it?
2) I’ve heard a lot of dodgy things about this Hoist holdings – but should I just pay it off in full?
I read somewhere that it may be possible to negotiate them removing the default of your credit report if you settle the default. Is this correct?
Sara (Debt Camel) says
“1) If the default was from several yrs ago, how come it’s only showing now and can I get them to backdate it?”
They are hoping that you will pay it! Yes, you can get them to backdate it, but read on first…
“2) I’ve heard a lot of dodgy things about this Hoist holdings – but should I just pay it off in full? I read somewhere that it may be possible to negotiate them removing the default of your credit report if you settle the default. Is this correct?”
Absolutely not. They will correct the date if it’s wrong, not if you pay it off.
At the moment it’s not even clear this is your debt… The first thing to do is to send them a Prove It! letter https://debtcamel.co.uk/prove-it/.
If it is this old credit card debt, then if you haven’t made a payment to it for over 7 years they must add a default date back then, which will promptly drop off your credit record as it is over 6 years ago. This explains what you have to do https://debtcamel.co.uk/debt-default-date/.
So….
– ask them to prove the debt is yours first…
– assuming it is the one you think it is, then ask them to correct the default date
Steph says
Hi I wonder if anyone can help?
Long story short I had a mobile contract won’t name who with I was on a monthly rolling contract or so I thought. Wrote to give notice heard nothing had a few letters from debt collectors I disputed amounts etc with company thought it was all sorted as I haven’t heard anything for 2 years. Recently I was declined mortgage as I have 3 defaults from Lowell relating back to this phone company. I am told it’s 3 separate accounts was only aware I had 1 account however, As soon as I realised that had been marked against me on my credit file I have paid them off in full also applied for credit builder credit card that I will pay in full each month to boost my credit score how long will this take and is it possible to get a mortgage before it drops off in like 6 years time?
Thanks
Steph
Sara (Debt Camel) says
I have no idea why there would have been 3 accounts – did you get that explained? I can’t tell if you think the defaults are reasonable or not – if they aren’t you need to dispute them. With 3 defaults your credit score will be very poor for 6 years, a credit builder card isn’t going to make much difference. You will probably be able to get a mortgage after 3 years though – go through a broker.
Steph says
I have no idea why there are three accounts can’t get a reasonable explanation even though I have tried. I do think they are unfair and also think it was Miss sold to me. I have been in dispute for two years and after finding they have been marked against me I have just paid in full as I am going round in circles and keep getting passed from original company to debt collection company last time I tried to sort it out with phone company I was told I’ve sold the debt so not my problem I can’t give you any information feel really let down by the whole thing really thought it had been resolved 2 years ago :(
Sara (Debt Camel) says
Well I can’t tell how far along the complaint route you took, but the “three accounts” seems mystifying and well worth pursuing. So if you haven’t already, you need to put in a complaint in writing (not on the phone) asking for an explanation for this and also your other issues. If there is no clear explanation for the three accounts, take the issue to the ICO, see https://ico.org.uk/concerns/. If your other concerns are rejected, take them to the Ombudsman.
Sean says
Hello,
6 years ago I went through a messy break up which also involved a lot of debt build up and unpaid bills.
I prioritised my debts in order to keep a roof over my head etc.
I’ve lived very basic life since then and slowly been clearing the debts defulted and closed.
I have gone from being 12k in debt to 2k in debt
I have also in that time started cleared and never defulted on several loans or car finance. All cleared.
However my credit score hasn’t budged. Infact I’m 140 points down from when I started a positive credit action.
No ccjs
What have I done wrong ?
Some how I feel gutted I’ve made all that effort when so many people run away from debt I cleared it.
What’s the point.
Sara (Debt Camel) says
Your credit record should be clearing over the next year as the defaults drop off. If any of them are later than that, read https://debtcamel.co.uk/debt-default-date/ and ask for them to be corrected.
It is pretty daft you don’t get credit for repaying a defaulted debt on your credit score. But you will still be better off than if you had ignored them, in which case CCJs would no doubt have started occurring over the last few years, making your credit record a lot worse for a lot longer.
She_ra says
Hi,
Thanks for all this advice.
I have 2 defaults. One from 3 years ago, a Quickquid payday loan; I have recently emailed a claim to them regarding irresponsible lending and am in the process of negotiating the removal of the default as they have upheld my claim. Can I firstly just check they can remove it completely rather than changing the status of the default?
Second is a mobile phone contract from 3.5 years ago. I am planning to use the money I receive from Quickquid to pay this off. However, on my credit file it shows as 2 defaults. One with EE and one with a debt management company.
Is it right that both are showing as default with the same balance owed? I called EE to discuss the debt and they said as they sold it on I couldn’t speak to them about it- yet they’re showing as the people I owe to.
Thanks
Sara (Debt Camel) says
re QuickQuid – it will actually be better for your credit record if they only remove the default and any late payments markers, so it looks as though the loan was settled on time.
re EE – is the balance showing as zero?
Natalia says
Hello,
I was hoping for advice. I had an ee account for which I cancelled my direct debit in April 2014 after I was made to believe the account was closed. Very naive.
In August 2015 I was rejected an upgrade due to an unsettled bill of £46. I settled the bill in full in August 2015, but found out that my EE account was sold to Lowell in October 2015.
I was very surprised to find out that Lowell had defaulted my ee account from March 2016, as they claimed they had to close my ee account down. I have been disputing my default with Lowell, provided a receipt of my final ee bill payment, but I am not getting anywhere. The whole situation is really confusing. I don’t get how I paid any outstanding balanaces with ee in August 2015, Lowell bought my account in October 2015, but my default shows as March 2016?
Lowell seem to claim they purchased my account from ee in October 2015 in good faith but I wonder if that purchase should have been carried out in the first place, especially as I had paid of my outstanding balance?
Lowell have been ‘ investigating ‘ this matter for over 2 weeks now but haven’t been able to provide me with any updates or a resolution.
What would you advise me to do?
Sara (Debt Camel) says
Have you put in a formal complaint? Email with COMPLAINT in the subject line if you haven’t. Say you have provided them with the evidence that you don’t owe EE any money and you want them to acknowledge this and delete the record from your credit file with all credit reference agencies as soon as possible.
Natalia says
Thank you Sara!
I have raised the issue and have been disputing via email predominantly. Haven’t really done a formal complaint though. That will be my next step as advised by you. I’ll post a comment with how I get on. It may be useful for others here.
Regards, Natalia
Paul says
Hi
I’m in my early twenties and last year had a very hard month with Christmas, car repairs and repayments all at once. I found I couldn’t pay them, and has no knowledge about credit scores etc. I phoned somebody for advice and they suggested i enter a DMP. I had no idea the affect it would have on my credit rating, and looking back, wish I just got a debt consolidation loan or borrowed from family and paid them back to keep my very good credit rating. I am now financially fine, i just had one bad month. I don’t feel as though the defaults represent my financial situation… is that just tough luck? I could easily repay the minimum payment that i was contracted to now… it’s just, I’m tied up in this DMP now and wonder whether its worth it. Being in my early twenties, I will be looking to get a mortgage within the next 1/2/3 years, is this even possible for me now, or would i have to go with an adverse credit provider?
Am i completely stuck with these defaults now? I don’t feel as thought the DMP agency made me absolutely aware of the affect it would have, i just thought it was a short term solution for people having a tough few months.
Regards
Sara (Debt Camel) says
have your debts been marked as defaulted? or arrangement to pay?
Which DMP firm was it, and did you say you just had one bad month and you would be alright afterwards? Is interest frozen on all of your debts? how much are you paying per month and could you increase this?
Paul says
They are all marked as defaulted. I did tell them I was having a bad month and needed help.
Looking back I feel as though instead of being pointed towards a DMP I could have easily entered a debt consolidation loan or similar. Now I’m stuck with the bad credit for 6 years.
I pay £100 per month to them all, but could easily increase this to the minimum payment.
The DMP firm are In control Debt solutions. I also pay them £30 for their service. I just wish it would be possible to explain my situation to the creditors and have my good credit score back and pay the minimum again.
It’s causing me so much stress and anxiety.
Also, interest is frozen on some apart from one.
Sara (Debt Camel) says
In practice there would have been almost no chance of you getting a consolidation loan at the point where you couldn’t meet the regular payments.
You should have been told that the DMP would affect your credit rating – you could complain if you weren’t – I expect they will still have the phone recordings to check.
I suggest you sack In Control Debt Solutions and take back control yourself. See https://debtcamel.co.uk/more-than-1000-people-using-cabmoneys-free-dmp-facility/. Then repay the debt still charging interest as your top priority, then repay the rest as fast as possible. This way you at least benefit from no interest being charged.
Steph says
Hi,
I have 3 defaults logged against me for a total of £706 I was refused a mortgage as I didn’t know anything about these defaults. I tried to settle with the company direct 2 years ago which is when the defaults were logged but not by origional company I have been going round in circles being told I need to speak to the debt company then origional company then back again. It is in dispute as they are saying I have 4 accounts with them when I only ever had one they also have an address that I’ve never heard of in my name? and although I have asked for evidence I have never recieved this. However I have now paid in full to current debtors who have logged the defaults but still in dispute. Also never recieved any default notice and cannot be provided with a copy? Even though I have now paid in full origional company still say I owe and they need me to send proof I have paid? This has not been intentional and I tried to resolve it at the time. Origional company have admitted on telephone mistakes have been made on telephone refuse to put anything in writing can anyone advise where I go from here?
Thanks
Steph
Tommy G says
Hi,
I currently have 3 default accounts. First one has been settled in full and will be reported until this month. I’m assuming check my file should reflect this in November, the 2nd has now been settled in full and is reported until December this year. The 3rd also being settled in full will be reported until February 18. Will i stand any chance in getting a mortgage in January? My current score is 534 and I have no other unsettled debts, late payments of money owed on the credit card. (The settled Debts were all paid within this year).
Sara (Debt Camel) says
Very little chance in January of a mortgage at a reasonable rate – even one default which has been repaid for less than a year is a major problem. Very good chance in March when your credit record will be clean.
Tommy G says
Ok thanks for you advise Sara
Steph says
I have 3 defaulted accounts for total balance of £706 I have since paid these off in full. Not justified but mobile phone company are crooks and apparently have no logs of any complaints made or any letters received I have been lied to for two years probably why and they sold debt with wrong details so I suffer. I am thinking of getting a credit card from my bank £1000 limit all within 6 month period I am hoping that this will show I can be responsible with credit and 12 months from now all hard inquiries will be removed? Obviously the paid defaults will still be there but if I am honest about them and have no outstanding balances what realistically is my chance of mortgage with decent rate this time next year?? Really confused about credit files etc
Thank you
Sara (Debt Camel) says
Well you can try to get a credit card from your bank, but with defaults on your credit record you may struggle… it’s better to use the MSE soft checker and not apply for anything unless that suggests you are likely to be accepted https://www.moneysavingexpert.com/eligibility/credit-cards/
You didn’t say when the default dates were. the rule of thumb at the moment is that most mainstream mortgage lenders want defaults to be over three years old AND to have been paid off for more than a year. See https://debtcamel.co.uk/mortgage-recent-defaults/
Steph says
I have been honest with bank they did a soft search and seemed to think I would be approved got an appointment Monday don’t want to do anything that could damage it more so if it turns out there’s a chance I won’t get it then I’ll leave it. Defaults all registered 2015 just paid them all off in full now when I realised.
Also we would have a 10% deposit don’t know how much difference that makes? We pass on affordability think it’s just the defaults holding us back?
Sara (Debt Camel) says
Is this your own bank?
The normal rule of thumb is that defaults have to be over three years old (yours aren’t) and paid off over a year ago (yours aren’t). But banks all have different rules and a 10% deposit is OK. I think it’s worth going along to your appointment on Monday – if the answer is No, then leave it another year :(
Paul says
Hi Sara
Do high street banks give mortgages for defaults over 3 years old which have been paid off?
Most of the content I’ve read online suggests they won’t even think about you if you’ve had any form of default on your credit report? And you’d have to wait the 6 years for it to drop off before approaching a high street bank. Is this true?
Sara (Debt Camel) says
Don’t believe everything you read online, especially about credit ratings! It may be possible to get a mortgage from a high street lender with default over 3 years that have been settled for more than a year. But you must go through a broker, not direct to a bank as yiu don’t know which are most likely to accept your application.
Steph says
Yes with my own bank this is for credit card though not mortgage at this point although he did suggest that maybe he could appeal decision if I was declined I am happy to wait a year and try again through a broker maybe and be honest? Just don’t want a higher rate mortgage if possible and don’t really want to wait until 2021 if I can help it we want to start a family soon and I’m not getting any younger :(
Zen says
Hi. Over the past 12-18 months I defaulted on 6 credit cards and a loan (total debt about 60k) but never late payments on my then mortgage. During this time, I started a DMP through step change. In around July of this year I was able to partially settle all of the accounts. I now have zero debt. My partners has no debt or bad credit whatsoever (with a perfect and ongoing mortgage repayment history) and is self-employed with an income c.35k. I have consistently had an income c.60k (for 9 years).
We hope to have a large deposit by the time we envisage buying a new home together; at around 50% LTV and about 2.5x total income. Given that my debts have only recently been cleared (and the defaults will remain on file for 5 years or so) what are the chances of us being accepted for a joint mortgage, in say 6 months from now? Would it simply be too soon (and should I expect my history to significantly impact this ambition for years)? Would it realistically be helpful to talk to a broker? Any other insight/advice would be gratefully received. Thanks in anticipation.
Sara (Debt Camel) says
I am guessing you sold your house to clear your debts. There is never any harm in talking to a broker and as you will have a large deposit and what sound like very good affordability metrics, you could decide to do this after 6 months. But it is likely to be easier to find you two a reasonable deal after July next year when all your debts will have been settled for over a year and I would suggest waiting until then. It will be easier still when all the defaults are over 3 years old but it’s worth having a chat with a broker before that point.
One thing I would say is that it is good to set up a regular monthly saving for a significant amount. This is not so much to increase what is a large deposit but to demonstrate that you have excess income at the moment and will find it easy to manage a larger mortgage.
Zen says
Thanks very much Sara – most helpful. I am indeed saving a large amount each month so it’s good to know that doing this might be of added benefit.
Paul says
Hi, I had an unpaid credit card debt which was sold to another company which got in touch with me and I settled the outstanding debt, however on my credit report I have 2 defaults one from the credit card comp and one from the company which brought the debt. As the debt was cleared by the 2nd company should I really have 2 defaults? Or only 1 from the credit card comp? Many thank for any replies
Sara (Debt Camel) says
yes, this is normal, it’s the way defaults and debt sales work. In this situation only one default affects your credit score, so you aren’t getting a double hit.
Paul says
Hi the reason I queried this, is would 1 default take your rating to below average.
Alex says
Hi I bought a house back in 2013 the house needed full refurbishment and was empty for nearly two years. I was never able to move in but registered my name for British Gas for the property. In 2015 I rented out the property and was occupied until October 2016. The property is now empty again. I just checked my Noddle Report and British Gas placed a default and ‘Gone-away’ which affected my credit score from 4 (512) down to 1 (531). I never received any default notice and the amount must be incorrect as the property was empty for two years from 2013-15. Also my name is misspelt on their records. What are my chances to clear this off my credit report. I am due for a remortgage next month. Please help. Thanks
Sara (Debt Camel) says
The chance of clearing this off your credit report isn’t good. If the property was empty there may still have been a standing charge, it depends on the tariff. There is no legal obligation to send a Default Notice. The misspelling is irrelevant. i suggest you phone them up, establish what the bill should be (you may be being billed for the time the property was tenanted in error?) and pay it. Then consider what your credit record should reflect once you have some more facts about what your bills should have been.
Charlotte says
Hi,
When I was 18 (25 now) I stupidly took little loans out with my old bank account and credit cards to help me get through college etc. Then panicked I couldn’t pay them back. It’s coming up to the 6 years and I didn’t know whether it was worth paying them back if they’re going to drop off anyway? They biggest one is £1800 and come to a total of under £5000! I could do with a trusted opinion! Thanks
Sara (Debt Camel) says
Hi Charlotte, this article https://debtcamel.co.uk/no-calls-or-letters-about-debt/ looks at your options in this type of situation.
Chris says
So from reading this and the ” How much will my credit score change if … ? ” article. I am taking away that me taking out a loan to pay off my one remaining debt and then paying that off monthly is going to do me no more of a favour than to just pay it off at £200 a month ? My frustration at the moment is this one debt of £2300 seems to be crippling my credit. I use Equifax and have done for over a 2 years to track and pay off the debts but my score has gone up by maybe 50 points and that was from settling a small old credit card debt I had. I have a small balance credit card of £300 but nothing else other than that. I’m desperately trying to improve my credit score now that I am in a strong financial position but just have no idea what the best way about it is. I haven’t defaulted or missed a payment for nearly 4 years and even my Equifax account shows this. I keep my small balance credit card usually about 30% utilised I just spend small amounts and pay it off in chunks in hope it will have some kind of positive effect, but doesn’t seem to be the case. Do you have any advice that could help me increase my credit score ?
Cheers,
Chris
Sara (Debt Camel) says
So the £2300 debt was defaulted about 4 years ago.
You are right that getting a loan to clear it would not help your credit score at all. And because you have a bad credit score, getting that loan would be expensive. As interest isn’t being added to this old debt (at least I hope it isn’t!) this would be a pretty bad move as it would cost you a few hundred pounds in interest. Paying 200 a month is going to clear it in a year anyway.
Time is the great healer of credit records. When all your defaults are over 4 years there will be a minor improvement but the big bump will come when the defaulted debts disappear after 6 years.
In the mean time there are only small 8mprovements you can try but they are worth doing:
– get that small balance credit card down to zero and then repay it automatically every month in full. This gets your credit score the biggest boost.
– if the credit limit on the account is tiny – less than £250 – ask for it to be increased to say £1000.
– get yourself on the electoral roll if you aren’t already on it.
Though these won’t make much difference now, the main aim of this credit card is to get you a good credit record, not an empty one, when your problems disappear.
(I’m assuming you have looked closely at your credit record and there are no problems with being linked to an ex or anything.)
Chris says
Yeah I got myself on the ER a year or so ago pretty much for this reason only. I have asked for the limit to be increased on the card so hopefully they say yes and sort that out. If they did up it to £1000, what would be the best way of spending on it to increase the credit rating ? It’s currently £300 so a little over the £250 but not sure if that is enough to take it away from the “bad” zone.
I will have to start using the card for more then, just put shopping and fuel on it and then pay it off in full so I don’t end up wasting it on nonsense. Nothing on the report there, I do know of another debt that is not on my report here but is on my experian report, but I don’t continue an account with them and as I understand it anything not on the report shouldn’t effect the score ? My aim was to just use the money supermarket link which shows you what loan companies etc. use what credit score agency so, bump my score up on Equifax and then use companies that use their service to check for scores, not sure if that is still a valid tactic or not though.
If they did up the limit to £1000 would it still be worth spending the lot and repaying each month ? Cos I could just move to living off the credit card and paying it off each month if that was the case. Appreciate your time and advice anyway! Thanks a bunch.
Chris
Sara (Debt Camel) says
You don’t have to – and shouldn’t! – increase your spending on the card. More spending will not help your credit score at all. What matters is having more unused credit there. The best thing is to just use it for a tank of petrol every month and pay it off in full, automatically, every month. Do not leave a balance on the card.
There is no point in worrying about getting all your 3 credit reports – Experian, Equifax, Call Credit – up. Most lenders will check more than one of them.
Also NEVER pay for a credit report. You can get all the details you need for free now, see https://debtcamel.co.uk/best-way-to-check-credit-score/
Zen says
Hi Sarah,
I had 7 defaulted accounts, all of which I settled (partial settlements), in around July this year. The recorded default dates (on my credit file) are between 10 and 16 months (ago). Most of the creditors have since recorded a default satisfaction date (DS) or a partial settlement date (PS) or both. 1 of the 7 accounts shows as closed but still with a balance (ie, not yet updated like the other 6). Should I chase this last creditor (Barclays current account/OD), to get them to zero the balance or will they simply update my credit file in due course? Should I also chase the other creditors, to get each of them to update my file with BOTH a DS AND a PS date – does this matter in terms of improving my credit rating, in time?
Thanks in anticipation,
Zen
Sara (Debt Camel) says
Yes you should ask Barclays to correct the balance showing to zero – they have had plenty of time since July to this, it sounds as though they have forgotten.
DS and PS dates won’t make any difference at all to your credit rating.
Nill says
Hi, really helpful site, thank you.
I paid off 5 defaulted accounts (from a debt management plan), 3 of the accounts had been sold on.
All five of the accounts show as settled on my credit report, however, the original 3 accounts that were sold are showing zero balance but no settlement date or that they are closed – there has been no updates since the sale date.
What should be shown on these accounts?
Thanks
Sara (Debt Camel) says
There is no need for them to be updated, a zero balance is fine. There will be flag attached to those accounts which shows they were sold to a debt collector who is now reporting them, so they are effectively ignored on credit scoring/assessment.
Nill says
Brilliant, thank you
Jim says
Hi, hopefully a long story cut short;
Struggled a few years ago and got myself in financial difficulties, but over the last 5 years have gotten myself back on track which is a great feeling. However, I have one issue that I cant get sorted. I took a small personal loan from hitachi in 2009, and in 2012 I defaulted on the payments, in 2014 Hitachi sold the debt to Cabot financial who in turn used their solicitor – Mortimer Clarke to chase it. In September 2014 I was in a position to clear the debt, which i did. Cabot duly updated their part of the credit file and shows the debt as “settled”,
but Hitachi still to this date despite many request have not, nor will they update their record, so the debt shows as defaulted with a balance of just over £1000.00. Cabot have been extremely helpful and so have Mortimer Clarke, but Hitachi….. down right painful! They say that it’s Cabots job to update the record, which Cabot have done, but the original agreement from hitachi still shows as a negative on my report. I am trying to re-mortgage but am being refused a mortgage on the hitachi agreement. I have raised a complaint with Hitachi, but no response, I have been in contact with the data dispute pigs at hitachi, who just say it’s not their problem. how can I go forward with them to get this information changed?
Sara (Debt Camel) says
so the Hitachi debt is still showing as having a balance? It should have been marked as having a zero balance when the debt was sold to Cabot…
ISHFAQ AHMED says
Hi,
My clear credit score was 312 and now just fallen to 105 yesterday , I have used my credit card of 25%(Credit Limit £6400), no other debt,no outstanding payments other than this issue below (paid in full yesterday)
I am renting a flat since June 2015 above a Pharmacy, and Landlord(the Pharmacist) told me that Water is included as they have one meter supply for years. I said fine and I did not receive any letter from Severn Trent until AUGUST 2017 stating that our record shows its empty property this and that. I rang them and honestly told since when I started living in. She got my details and opened an account for me on 2nd August . After that I asked Landlord that it is unfair that you misguided me and was asking her to pay that or sort it out with Severn Trent .In the meanwhile my November Credit Report has come and seriously gone down. Yesterday, I got my report , I immediately clear that all outstanding plus till March 2018.
I am planning my first time mortgage in April 2018(when i do my self assessments) and it is worrying me what will happen. That Stupid landlord ruined my credit score.
Please advise, I have already cleared that but will it be possible for me to get a mortgage if we explain this to Lender. My online account states generated on 2nd August for Severn Trent.
Sara (Debt Camel) says
Three points:
1) if you never received a bill from Severn Trent, then you should ask them to delete the default on the grounds that you were unaware that you owed the debt before and you are still disputing it with the landlord. Point out that if you had been sent a bill before, this could have been sorted at a much earlier stage.
2) You still need to dispute the debt with your landlord. If your landlord agrees that you were misled about the water, then this will help in your argument to Severn Trent.
3) Unless you can get this default removed, it is going to make it very hard for you to get a mortgage for a several years. BUT your credit score was not good before this default – you need to look at it in details and see what else is wrong with it.
Sophie says
The same thing happened to me but with South East water. They registered a default and I lost over 300 points. However i called them and told the this was a fraudulent account they looked back on the previous notes because I had called before. They could see when I moved in and then when the account was created. I think they were a year apart. After that they removed the default. Can you provide them with proof when you moved in and when the account was created? I hope you sort this out I am in the same boat trying to get my first mortgage next year
ISHFAQ AHMED says
I just had an online chat with them and the lady said
“I can assure you we haven’t registered a default against you, which is what affects your credit file for 6 years, its been registered s a late payment, however now its been paid and will be updated on the next credit report”
Will it be OK for me? I do not know how for late payment Clear score can reduce the score from 312 out of 700 to 105
Danny says
I have a ccj an a default from 2014 both paid in full in aug of 2017, I have check my credit score an it says fair plus I’m getting offered credit cards from them bank could I still get a mortgage??
Sara (Debt Camel) says
See https://debtcamel.co.uk/mortgage-recent-defaults/ – it’s too early really and the CCJ does make it a lot harder. I suggest you wait until summer 2018 and then talk to a broker.
Donna Crossley says
I have just got a default 4 weeks ago but will get the money to pay it off in 28 days will this affect me getting a mortgage with my partner if payed off in full.
Sara (Debt Camel) says
Yes it will cause a problem. See https://debtcamel.co.uk/debt-options/less-common/write-off/. If you have a good reason for not having paid it earlier and a large deposit a good mortgage broker may be able to help.