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
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.
Nicole West says
I had a few HSBC accounts and one in particular was a credit card. Although I paid it off in April last year my credit report is still saying I’m defaulting on this account even after 9 months! I spoke to the bank about all my accounts I had with them and they have assured me they have all been paid off. Why even after this long am I still defaulting!? I need to go into the bank and have it out with them as I refuse to speak to HSBC customer services on the phone!! Useless and unhelpful so will not do that again!
Sara (Debt Camel) says
Is there a balance showing on the account on your credit record?
Nicole West says
Yeah there is. It says it has a balance of £575 then it says updated 30/11/2017 and the status says Default.
Sara (Debt Camel) says
OK, the problem isn’t really the “default” marker, it is the fact they haven’t updated the balance to say zero. When they correct that to be zero in April last year, the defaults after that will automatically be removed.
I suggest talking to customer service on the phone again and explaining you are complaining that your account on your credit record is still showing as owing money.
Shan says
Hi
I had 4 defaults placed in my name in 2013(total of 40K) Debts were sold to different companies. I was with a Debt management company and was making small payments(£120a month) for Last 2.5 yrs i stopped paying as the debt management company was closed and also i lost my job and was struggling.
When will the defaults go out of my Credit file?( I assume it will be in 2019)
Now since i am not paying anything and also i have moved home 3 years back and they dont have my updated address.
What will happen? is there a chance of getting CCJ?
I am hoping to get a fresh start in 2019, when the defaults drop.
Please advise me on this as i m very stressed.
Thank you
Sara (Debt Camel) says
Yes, the defaults will go in 2019. When did you last make a payment to these debts?
Shan says
HI Sarah,
The last payment made through the Debt management company PDHL, I think it was closed in early 2016. almost 2 years a go was the last payment, and i didn’t response to any creditors after that. Pls advise on this.
Sara (Debt Camel) says
Your creditors then have until early 2022 to find you and take you to court for a CCJ. I can’t guarantee this will happen, but these are large debts so the chances of all of the creditors deciding not to bother is pretty low.
See https://debtcamel.co.uk/no-calls-or-letters-about-debt/ – that suggests a good option might be to start saving up money in order to be able to make a partial settlement offer if you are contacted.
Another serious option given the large size of the debts would be bankruptcy – it is a shame you didn’t opt for this back in 2013 or 2016, but don’t let that stop you making the right decision now.
Shan says
Dear Sarah,
Thank you so much for the reply. Before speaking to creditors is it work asking for a CCA. I found the below.
1) If for any reason they can’t supply a copy of an agreement, at all, then the account cannot be enforced through the courts.
(2) Pre April 2007 agreements MUST include what’s known as the “prescribed terms”, the basic rules of how the account was operated, for example, it must include the credit limit, the interest rate applicable, how and when to make payment, how much to pay etc etc.
If it dosent include this information, again, it cannot be enforced through the courts.
A reconstituted agreement can be produced no matter when your agreement dates from, however the above still applies to pre April 2007 agreements, there is no requirement for a signature on any agreement.
Is this right? All my agreements are 2006. only one is May 2007. Is it worth asking for a CCA?
Thanks
Shan
Sara (Debt Camel) says
It sounds broadly right. But what is your plan if at least one of the 4 creditors does produce the CCA? Are you then in a position to settle those debts?
Shan says
Hi Sarah,
Yes i can ask some help from family for a reduced full and final settlement. But is we request CCA and if they produce , does it mean they will not accept reduced payment ? and demand will be high?
Also with your experience pls let me know if we request CCA , what is the chances that they will not have? the debts was with lloys credit card, MBNA, Barclays, and lloyds Overdraft. Amex (Amex i can see any recorded in any credit files)
Please advise as i need to sort this issue, as i m going to find work in financial sector and will have trouble if i have any CCJs.
Thanks
Shan
Sara (Debt Camel) says
“if we request CCA and if they produce , does it mean they will not accept reduced payment ? and demand will be high?” No, but these things can simply be unpredictable.
” lloys credit card, MBNA, Barclays, and lloyds Overdraft” a CCA may not be relevant for the overdraft at all. MBNA seem to generally be worse at finding CCAs than your other lenders, but I don’t think I personally have seen enough for this to be a generally useful guideline.
If you get a well paid job, you can simply start repaying the debts at much higher rates and you are unlikely to get a CCJ if you do this.
Shan says
Thanks for the reply, Since i haven’t made payments and i didn’t have contact for 2 years with the creditors. to request CCA , what is the procedure? What is your advise pls? Should i first try with CCA or just start with smaller payments?
Coz i only can afford like £50-£100 a moth for all 4 creditors. Total debt about £40K.
If they cant send CCA, does it automatically get cancelled?
Thanks
Shan
Sara (Debt Camel) says
“Should i first try with CCA or just start with smaller payments?” it’s hard to tell, sorry, you have large debts and would only offer tiny monthly payments, creditors can be unpredictable.
“If they cant send CCA, does it automatically get cancelled?” no the debt remains legal, they just can’t enforce it in court. It will remain on your credit record until it drops off 6 years from the default.
Shan says
Hi Sarah,
Thank you so much for your reply, This is my plan now. Sending CCA letters to all 4 lenders except overdraft and wait for a reply, If i dont get a reply within a month, then i know i wont be enforceable. If i get letters back, try and asked for a final settlement figure. or agree small monthly payments. Realistically what is a least percentage a creditor will accept. is 20% acceptable? i was not making any payments for 2 years.
Thanks.
Sara (Debt Camel) says
“Realistically what is a least percentage a creditor will accept. is 20% acceptable? i was not making any payments for 2 years.” Again this is very random. You will maximise your chance if you say where the money is coming from and supply an income & expenditure statement and proof of your income, so they can see they would only get a very small amount each month.
Shan says
Dear Sarah,
I would like some advise on this matter pls. can you recommend some company or a charity who can help me deal with CCA letters and final settlements or small payments?
I know step change- pls do they assist with CCA request?
I haven’t made a payments for 2 years and i am worried if they will apply CCJ.
Thanks
Sara (Debt Camel) says
National Debtline has a good factsheet on CCA requests with template letters: https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx. Usually what you get back after 6 weeks is pretty clear cut – here is your CCA or we can’t find it. if you are unsure call National Debtline and talk to them about what you have been sent.
A solicitor would charge you for sending the same letters – pointless. StepChange don’t do this but will set up a DMP if you want one.
S Pearson says
I have 3 defaults on my credit score given from a finance company that has 3 different accounts that they have bought. My credit score is currently very poor. I have now cleared 1 of these and will be clearing the other two in the next few months. I am paying the full amount so that they all say they are paid rather than settled. Will this help improve my rating by September when I would like to apply for a mortgage? My credit score on Experian is 409 out of 999
Sara (Debt Camel) says
What are the default dates on these three debts?
Sue Pearson says
1 is from 2014 which is paid in full – another 2015 which is outstanding. Then I have one which is really annoying – southern water direct debit cancelled by mistake and went default very quickly despite phoning to sort it out this is 2017 for £242 which was paid straight away but they refuse to remove it.
Sara (Debt Camel) says
Paying these debts is a good idea because you won’t get a mortgage with unsettled defaults on your credit record.
BUT it will make no difference to your credit score (so don’t be disappointed when that doesn’t change).
AND you are very unlikely to be able to get a mortgage this year. The rule of thumb is that most mortgage lenders want your defaults to have been over 3 years old AND to have been settled more than a year ago. So unless you can get the Southern Water debit deleted (have you complained in writing?) that will be in 2020 :(
Sue Pearson says
That is terrible news :( I will write to southern and complain – they have not been very helpful so far and have lied about what their representative told me which is really frustrating. I don’t think they want to back down and lose face. I will write anyway. I was so certain they woukd remove it as it was their error.
Sue Pearson says
Carla southern water original apologised and said it was their error but have now back tracked – do these companies actually ever record their phone calls? If they don’t remove it but I inform mortgage broker of the complaint and back ground etc would that help at all? I’m due to try and buy Sept this Year :(
Sara (Debt Camel) says
I suggest your complaint should tell them to listen to the call recording – but I don’t know if they have them.
NB you also have a problem with the 2015 default because it’s nit yet settled. Most mortgage lenders like a default to have been paid off more than a year ago.
Sue Pearson says
Thank you so much for your help and sorry for all the questions – would a guarantor and a larger deposit help at all?
Sara (Debt Camel) says
Possibly. But your best move at the moment is to settle the 2015 default asap and to be persistent in complaining to the water co.
Mike says
Hi Sara,
Sorry to bother you, i’m just a bit confused about defaults on my credit file. I have two defaulted accounts (Barclays and MBNA who sold it on to Aktiv Kapital / PRA Group), and I have been paying set amounts to these for the last 5+ years. Both defaults will shortly be disappearing as they were registered in February 2012. I will be receiving a lump sum in April this year which will help me to clear these debts, which I am keen to do as I am aiming to get a mortgage in 2020/2021. Should I pay the full amount owing or should I try to agree a full and final settlement on these – i.e. what difference will there be on my credit rating for these two options? Will a partial settlement remain on my credit file for 6 years? If any partial or F&F settlement will have a negative impact on my credit in future then I would rather try and pay the full amount but am confused as to which is my best option. I also have an old Barclaycard account which was sold on to Link Financial but this is not shown as a default, I will also be looking to pay this off.
Any help or advice would be gratefully received and greatly appreciated.
Kind regards,
Mike.
Sara (Debt Camel) says
When did you last make payments to these debts? When was the MBNA account opened? What sort of debt was the Barclays one and how old is that?
Mike says
Apologies Sara, the MBNA account was opened in around 2009, the Barclays debt is from an old current account that I had. Payments have been made every month from 2012 until present.
Thanks,
Mike.
Sue Pearson says
Thank you so much for all your help – it’s very much appreciated
Mike says
Hi Sara,
Thanks for your swift reply.
I have been paying set amounts to these accounts every month, last payments were made at the end of December 2017 and next ones are due in about 5 days.
Kind regards,
Mike.
M says
Sara
I have just finished my dmp all accounts are now closed on my credit file, I have taken out a credit card and paying back in full
I understand that the defaults will fall off after 6 years, I’m on electrol roll also
Is there any other ways to improve credit
Sara (Debt Camel) says
Sounds like you are doing everything you should be doing. How long until the defaults go? We’re all your debts marked as defaulted?
M says
Not sure on the exact dates
Should I request them from credit agencies do I need to ask them all as they may have different answers
Who do I need to request from?
Sara (Debt Camel) says
See https://debtcamel.co.uk/best-way-to-check-credit-score/ and yes, check all three CRAs.
M says
They range from 2013 to 2014 so 2020 if I stay out of debt should be able to apply for a mortgage With a deposit also, maybe ask do help to buy scheme
Would payday loans cause issues to my credit file if I took them out and paid on time would a loan application be hindered because of them
Sara (Debt Camel) says
That’s good. By 2020 your file should be clear of the old problems. You may even be able to get a mortgage sooner – many lenders don’t mind old defaults if they have all been settled for more than a year – but in practice it will take some time to get a deposit together.
Recent payday loans, even if they are paid on time, are a disaster for a mortgage application – lender view them as a sign you were in big financial trouble. So from this point on you should avoid them like the plague.
If you have used payday loans in the past, have you looked at seeing if you could get a refund for “unaffordable lending”, even if you did repay them on time? See https://debtcamel.co.uk/payday-loan-refunds/. Could help with that deposit!
Jack says
Hi Sara,
I had 2 defaults on my credit file I have just had one removed from the lender due to this being incorrectly recorded which is great news
The other default was a NatWest credit card, unfortunalty I was between jobs so missed 3 payments and this fell into default.
The Credit Card was opened in 2011.
This happened in Febuary 2017, I am paying £400 a month to clear the balance with a debt company, the balance is £2000 now so will be cleared in 5 months.
when should I start to see my credit file improve? will one of the defaults being removed automatically boost my score?
I have 3 other credit accounts ( sofa, DFs, Vodafone Phone contract and Natwest loan ) these are all completely up to date and never missed a payment so all in all fairly good payer,
its just the NatWest default that’s dragging my score down.
any advice would be great
Sara (Debt Camel) says
One default out of two going is good news. Unfortunately, the other default will mean your score is going to remain poor until February 2023. Repaying the debt won’t actually help your credit score, but it will mean there is no risk of a CCJ and some lenders will be more prepared to lend to you.
Paul says
Hi there,
I have been paying a debt management company over £200 per month for around the last 8-9 years. I recently looked at my credit score. My score is perfect. I can get credit cards, loans etc if I wanted. My question is, why I am still paying the debt management company? If debt goes after 6 years and I have been paying for this long, obviosly these debts will have been wrote off and sold to a 3rd party. Can I stop paying them now? If not, why not if they are not on my credit score?
Sara (Debt Camel) says
This article looks at this situation: in detail: https://debtcamel.co.uk/paying-old-debt/
M says
Perfect thank you
I will see what I can get back
Thanks for your advice again
postie123 says
hi me and my wife are saving for a mortgage I have 6 defults most will drop off next year apart from 2 of them that will in 5 years we are going to save from now for 3-4 years and hope to have 30k for a deposit my defaults are with the same company and they have offered for me to settle at a much lower price if I pay the lower price for full and final settlement by the time we go for a mortgage it will only be the 2 defaults left will this affect us as they will be 4-5 years old and and are only very small balances anyway hope you can help thanks
Sara (Debt Camel) says
The ones that will soon drop off definitely settle at as low a rate as possible. The 2 that will still be showing, if they are only small its probably best to pay in full as you wont be saving that much!
Gary Alex says
I have 6 old debts that I have been paying very small amounts toward for probably 10 years.
The debts are all sold on to companies who now manage these debts. The original debt owners will have signed these off a long time ago. None of these debts are on my credit file anymore. It seems likely to me that none of these 3rd party companies can legally now get me with a ccj as they would have done this before the 6 years. So I’m gonna ask for cca details from all of them.. I can’t even remember what they were for but I’ve kept the payments going as they were so small it didn’t bother me. Do you think I should ask for cca details .. And should I keep the payments going for now. Any opinions welcome
Sara (Debt Camel) says
“It seems likely to me that none of these 3rd party companies can legally now get me with a ccj as they would have done this before the 6 years”
No. The 6 year statute barred clock hasn’t yet started ticking because you are making payments to the debts. Debt collectors happy to watch small amounts roll in with no hassle. It is VERY unlikely any of them has even thought about court action, let alone checked to see if they can find the CCA agreement.
With such old debts it probably is worthwhile asking for the CCA agreements. The possible downside is if an agreement can be found then the DCA may then decide to go to court armed with it unless you increase your payments.
If you ask for the CCA agreement I would suggest still making payments.
Paul says
Is it not easier instead of using a debt management company who take a percentage of your monthly payment, to actually contact the debts outselves and get an early settlement fee? Would we not get a better figure doing that and less to pay in the long run?
Sara (Debt Camel) says
Don’t use a commercial debt management company – go to StepChange – they don’t take any of your payment, it all goes to your creditors.
I’m not sure what point you are at with your debts. If you have only recently defaulted, you won’t get offered a settlement amount. And many people couldn’t get the cash for one anyway. F&Fs are good when they work, but they aren’t an option for everyone. See https://debtcamel.co.uk/debt-options/less-common/full-final/.
Paul says
I am around 10 years in so will no doubt get a settlement figure?
kashif hussain says
Hi. I defaulted on 2 accounts in 2012. Both were loans. I started paying again in 2015 through debt collecter solicitors. my agreed payments are upto date since but the Default is there on my file every month on both accounts with these debt collecting agencies. is this right and when should these go from my credit file, as i was hoping it was going to be 2018.
Sara (Debt Camel) says
The two defaulted debts will both disappear 6 years after the first default – so if that was 2012, they will be going this year.
kashif hussain says
thankyou so much for your reply. and i shoudnt worry about the defaults added every month in both of these debt collecting accounts although my payments are upto date?
Sara (Debt Camel) says
Once a debt has been marked as defaulted, a default will be added every month whatever you do until it drops off. It’s a mad system…
kashif hussain says
ok so its the orginal default date that matters.
Derek says
Hi. I have a debt outstanding now with Cabot Credit for £636 , default date August 2013 . I have ignored any contact with Cabot since they acquired the debt . I will be in a position to pay off the debt later if this month , this is my only negative on my credit score .
My credit score 563 with Noodle and 310 with ClearScore. How long will it take to improve my credit score after clearing the debt ? What will happen if I wait until the 6yrs are up as I read my credit rating will still improve as the debt becomes older .
Thanks
Derek
Sara (Debt Camel) says
Paying off the debt won’t improve your credit score at all. It will stop Cabot going for a CCJ which would wreck your credit score though… if you wait until the debt drops off your credit record in August 2019, your credit score will improve a lot if there hasn’t been a CCJ.
That’s quite a long while to wait though. You may well want to know that this debt is sorted. One thing you could do is offer a full and final settlement later this month, see https://debtcamel.co.uk/debt-options/less-common/full-final/.
Mike says
Hi Sara,
Sorry to bother you, I’m just after some advice on whether to pay off some old debts in full or to try for a lower F & F settlement. Debts are as follows:
Barclays Bank old current account – defaulted in Feb 2012 so dropping off shortly
MBNA credit card (then Aktiv Kapital / PRA group) – defaulted Feb 2012 so also dropping off shortly
Barclaycard (now Link Financial) – no default shown and my Noddle report shows this account as up-to-date
I have been paying set amounts to all three creditors since 2012 and am up to date with this every month.
I will have a lump sum in April/May this year which I can use to settle these debts. I am keen to get this done as I would like to get a mortgage in 2020/2021. My question is whether trying for a lower settlement agreement will have any long-term ramifications for my credit report. I know that paying them off after defaults have disappeared won’t improve my score, but will any partial settlement remain visibile for a further 6 years? Also, am I better off aproaching the three creditors myself or using a debt advisor?
I hope this all makes sense, any advice would be greatly appreciated.
Kind regards,
Mike.
Bryan Duggan says
Hi. I completed a DMP last October and settled everything. I had defaults that were in Feb 2012 so these will come off and one more in April. However, one other account (Home Retail Group) I decided to increase my payments to them. They never put the account to default 6 years ago and set it to a 3. A year and a half ago when I made the increased payments, they classed it as missed payments saying I had broken the agreement. Therefore by paying MORE their system said it didnt match the expected payment. Had I not paid a penny back it would have defaulted 6 years ago and I would have a clear credit file. Not now. I complained to them and they said in writing that this is correct, the fact I paid more was breaking the payment arrangement and the 4,5 and then 6’s will stand on my credit file . That was just over a year ago when it went back to a 1 on Experian. I am really annoyed at this . It could be the difference between a 5.5% re-mortgage and a 1.9% . A difference of 85k over the lifespan of a mortgage, its that serious. I have taken this further to the FOS but I wondered if anyone else has had a similar situation, Its crazy that I have been penalised by doing the right thing. I even had a supporting letter from the DMP that I had never missed a payment.
Sara (Debt Camel) says
It does indeed sound mad -not a fair way to treat a customer at all. This is a point you should make to the Ombudsman using those exact words – “not fair” can sound like a kids’ playground dispute, but the regulator, the Financial Conduct Authority, has “treating customers fairly” as one of its main principles.
I hope the FOS upholds your complaint – if the FOS adjudicator rejects it, ask for it to go to the second stage, an Ombudsman.
Bryan Duggan says
Thanks for the response my submission was of the tone that you suggest . Thankfully a high st lender has looked at my case and will be willing to over look this . But to have something on my credit file for another 5 years is horrible considering I have paid all of the 30k I owed over a space of 6 and a half years through the DMP. You would assume the DMP company would have helped me avoid this , they made all the payments to the creditors but it is what it is . Just a stupid computer system that can’t marry up that an over payment should mean the agreed amount is paid . Not logging it as a missed payment because the values didn’t match , that’s draconian
Mike says
Hi Sara,
Sorry to bother you, I’m just after some advice on whether to pay off some old debts in full or to try for a lower F & F settlement. Debts are as follows:
Barclays Bank old current account – defaulted in Feb 2012 so dropping off shortly
MBNA credit card (then Aktiv Kapital / PRA group) – defaulted Feb 2012 so also dropping off shortly
Barclaycard (now Link Financial) – no default shown and my Noddle report shows this account as up-to-date
I have been paying set amounts to all three creditors since 2012 and am up to date with this every month.
I will have a lump sum in April/May this year which I can use to settle these debts. I am keen to get this done as I would like to get a mortgage in 2020/2021. My question is whether trying for a lower settlement agreement will have any long-term ramifications for my credit report. I know that paying them off after defaults have disappeared won’t improve my score, but will any partial settlement remain visibile for a further 6 years? Also, am I better off aproaching the three creditors myself or using a debt advisor?
I hope this all makes sense, any advice would be greatly appreciated.
Kind regards,
Mike.
Sara (Debt Camel) says
“I know that paying them off after defaults have disappeared won’t improve my score, but will any partial settlement remain visible for a further 6 years?” No – see https://debtcamel.co.uk/ff-credit-record/ for details.
“Also, am I better off approaching the three creditors myself or using a debt advisor?” DIY in my view. Debt advisers aren’t any better at this than you are and some get huffy if you don’t offer each creditor the same %.
Also for the MBNA debt, it’s probably worth asking the debt collector to produce the CCA agreement – see https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx. If they can’t, the debt is unenforceable in court and you can simply stop paying it. Or offer a much lower amount to settle it!
You need to try to get a default added for the Barclaycard / Link account. or it’s going to stay on your credit record for 6 years after it is settled. See https://debtcamel.co.uk/debt-default-date/
CharlotteM says
Hi,
My current credit score is 620. I have 5 x defaults on my credit score, that I have been paying back since 2013. Am i right in thinking these will be wiped from credit report in 2019? Will my score then improve?
The reason I am asking is that I applied for a mortgage with my partner 3.5 years ago and I was obviously declined, but we are looking to remortgage in the next 6 months and I want to be put on the mortgage seeing as I am paying half of it every month, but am not on the mortgage. Would it be worth me trying? I have a very good job and earn a very good wage so have good affordability. Pls help
Thanks
Sara (Debt Camel) says
What are the default dates for these 5 debts? they may be in 2013, but “paying them back since 2013” isn’t always the same as when the default dates are.
Yes your score will improve when the defaults go … but this has NOTHING to do with whether you can get a mortgage! You have to actually settle these five debts. If you have a good wage, why haven’t you paid them off?
CharlotteM says
How can I find out the default dates?
Because the debts are around 15K. I’ve been working at paying them off as I mention above. The reason I defaulted in the first place is because during that period my partner walked out on me and my son.
Sara (Debt Camel) says
Check your credit record with all three credit reference agencies, see https://debtcamel.co.uk/best-way-to-check-credit-score/
Parvina says
Hi Sara
I just this last month (Jan) pulled my credit report & learned of a CCJ which I had no idea existed for a parking fine I never received due to changing address. The CCJ date was June 2016. I moved house in October 2015 and despite informing the DVLA, they had the wrong address, so parking fines & court notifications would have gone there. I have never had the opportunity to pay the fine & was thinking to apply to the court to remove it on these grounds, which will cost £255. The CCJ amount is £216.00. Any advice on how to proceed would be much apprecited as I am trying to get a mortgage & this is hindering me greatly. Many Thanks – Parvina
Sara (Debt Camel) says
I am assuming as you have a CCJ that this is a charge from a private parking firm, not from the council or the police.
National Debtline have a good factsheet on how to set aside a CCJ and talk to them if you need any further help with this https://www.nationaldebtline.org/EW/factsheets/Pages/howtosetasideacountycourtjudgment/settingasideaccj.aspx
It is incredibly annoying to have to pay more than the CCJ value to set it aside, but if you need a mortgage it will make your life very hard if you don’t.
Tracy says
Hello
Can I ask, if you negotiate partial payment of CCJ (held with solicitor and paid monthly for the last 5 years) if the partial final payment is accepted how will this show on credit rating and how long will it show as CCJ on file? Original debt from Nat West.
Thank you
Sara (Debt Camel) says
The CCJ will not be marked as satisfied unless you pay it in full. It will drop off 6 years from the date of the CCJ.
Simon says
Hi Sara,
I have a debt from HSBC which stems from 2012, i didn’t recall the debt as i was living in Spain from 2013. I came back to the UK in 2017 and upon checking my credit record i contacted HSBC and sought more information of the debt, i was then told the bank paid the debt of £130 which was owing and the account was closed. My credit record shows that this one debt is defaulting every month since 2012, it is the only debt i actually have and it is decimating my credit rating. Is there anything else i can do, or is my only option to wait until November when the debt reaches 6 years. Thank you
Sara (Debt Camel) says
Was this an overdraft? Or a loan?
Farrell Mitchell says
Hi I have a credit score of 0 all through faults of my own bee a young immature lad , but now I’m older and a father I would like to build this up and hopefully have a mortgage in the next few years my debts are
CCJ from june 2013, £561
Contract phone March 2013 £530
Payday loan may2014 £385 was only borrowed £80 wish I’d of payed that back
BT jan2017 £333 (currently contesting)
Thanks any help would be appreciated .
Sara (Debt Camel) says
The CCJ will go in June 2019.
The March 2013 phone default – have you repaid that? If not, the danger is that you could get a CCJ for that. See https://debtcamel.co.uk/no-calls-or-letters-about-debt/
The payday loan – you could consider making an affordabilty complaint about that, see https://debtcamel.co.uk/payday-loan-refunds/. If you win the complaint, any negative marks will be removed from your credit record. Also if you had other payday loans, complain about them – getting some money back could help clear some debts.
The recent problem with BT last year is a bit of a disaster as that will be on your record for another 5 years, so I hope you can get that sorted.
Do you currently have a credit card?
Also are you on the electoral roll?
Farrell Mitchell says
Hi thanks for reply
The phone contract sent me a letter yesterday and offered me 40% off the payment so got lucky there so set up a payment plan for that.
I will look into the payday loan
Yes I have a credit builder card with just 200 pound limit , but I aren’t on electoral roll.
Unfortunately I’m going to have to pay the BT off but when this is payed in full will it still affect my future credit score building thankyou.
Farrell Mitchell says
Hi Sarah any more advice would be great thanks I understand your very busy.
Thanks in advance
Sara (Debt Camel) says
Paying the BT debt won’t improve your credit score I am afraid.
Jan Marston says
I have had a fantastic credit rating over the last few years, however I recently got a ccj on a debt that is 13 yrs old. It was through a business centre. (I thought it was a scam because the stamp on it did not look real)….will this affect my credit ratin
Sara (Debt Camel) says
Yes, your credit rating is now wrecked for 6 years. If you had a defence to the CCJ (was it so old it was statute barred?) you need to urgently look at your options see https://debtcamel.co.uk/help-ccj/.
luke says
Hello,
I am working on restoring my credit score after years of being a young chap who never paid his bills. I used to leave my parents to it and accumulated a fair amount of defaults. Some are older than others.
At present i have two active accounts being my current bank account and my phone bill (which is a new account simply to help build credit) I have recently taken a small loan of £500 with my mum as a guarantor to again rebuild my credit by simply paying it back and using the money for nothing else but paying it back.
my question is will the loan repayments help build my credit back up and is there anything else I can do to start rebuilding my credit score? i do not have any outstanding debt whatsoever but my score is sitting at 210.
I find it hard to get any information on things I can do. i am very good with money now and hope to build my credit over the next year to hopefully get a mortgage with my partner who has a score in the 900s.
any advice is appreciated.
Luke
Sara (Debt Camel) says
do you have defaults and CCJs showing on your credit records? What dates?
Getting a guarantor loan is a very poor way to improve your credit score, see https://debtcamel.co.uk/bad-credit-rating-amigo-loans/.
Much better ways would be to:
a) starting saving every month with LOQBOX, see https://debtcamel.co.uk/loqbox/ for how this works
b) get a “bad credit” card such as Vanquis, use it for something small each month and then repay the card in full, so you don’t leave a balance and don’t pay any interest.
luke says
Thank you for replying!
My Defaults are all 2016 and i know will drop off in six years.
I have around £5,000 savings in my bank and only took the loan to improve the credit there is absolutely no way i would miss a payment, the reason i did this is because it was simply the only way i could get credit to build my score as i am not eligable for a bad credit credit card. I also only got a sim only phone contract at £15 per month so both are very affordable and the interest on the loan is only £118 which i dont mind as i am hoping it helps my score.
With that in mind and the fact at present i can get a bad credit card (i wish) woulud you suggest keep repaying the loan as normal (or closing off in full with the funds and forgetting that) + Opening a LOQBOX account also and paying £20 per month to also help.
I am also going to register with credit ladder as i spoke to experian who tell me reporting my rent each month will now be reflected on my score.
I am hoping with my phone bill, loan and now loqbox and rent being reported i may start to see an increase.
am i heading in the right direction or is there other things you would suggest. i can appreciate it takes time but i am really struggling to find the right information.
Again your time and help is genuinely most appreciated!!!!!
Luke
luke says
I have five defaults and no CCJs
Sara (Debt Camel) says
With 5 defaults your credit record will remain rubbish until 2022. Have you repaid these 5 debts?
Credit Ladder will not make any significant difference to your credit score – it may be some small amount of help if you had nothing on your credit record but against 5 defaults it isn’t going to make any difference at all.
The guarantor loan equally will only be a tiny improvement but I guess it isnt long until it ends if it was only £500 and you are paying £118 a month.
luke says
Hi Sara,
Yes i have repaid everything i have no outstanding debt to my name.. I went through a very difficult stage and my parents who kindly looked after my finances when they went very wrong ended up forgetting about my finances due to them divorcing. i know its a sob story but it then led for me to forget after moving out hence why its taken me 2 years to realise how damaged my score is.
When you say my score will remain rubbish do you know if i will find it extremely hard to get a mortgage in the next year despite having roughly £10,000 savings by the end of the year and also my partner with great credit score and the same savings.. I know thats asking how long is a piece of string but you seem very clued up! we will also posisbly have a deposit gifted to us of around £40,000.
The loan is £51.53 per month for 12 months so i thought would give me credit improvement on repayments on time. I just opened a Loq box at £20 per month also.
if my score is going to be rubbish until 2022 is there much point me messing around doing all these things to try and improve it? or do the defaults define me until that date!?
Thanks
Luke
Sara (Debt Camel) says
Two things
– the effect of defaults does gradually get less as they get over 2 years old and then over 4 years old, see https://debtcamel.co.uk/credit-score-change/
– mortgage lenders care less about your credit score as a figure and more about your credit history. There are high street lenders that don’t mind about defaults if they are all over 3 years old AND they have all been repaid for more than a year. So late 2019 may be possible? A larger deposit so you are borrowing less makes a difference too.
Why not come back in a year and say how things have changed? You need to be wary of applying for new credit in the months before a mortgage application.
Emma W says
Please can I ask advice regarding an entry on my credit file. I went bankrupt in June 2013, discharged June 2014. We have been trying to clean up our credit files in order to apply for a mortgage. One lender had no satisfied date at all. When we contacted them in January to update the details with default date to June 2013 and settled date to June 2014 they did so and the balance is now recorded as “0”. However the balance all the way through up until last month is the default balance…not changed to state “0” from the discharged/settled date. Please can you advise on this because we are looking at applying for a mortgage and want to know if this is right…I am assuming not. I have spoken to Experian (the other credit agencies do not show the balance in this way) and they are unsure.
Sara (Debt Camel) says
The balance should be zero from the discharge date, see https://debtcamel.co.uk/credit-file-after-bankruptcy/.
BUT this is unlikely to make much difference in a mortgage application – you need to wait unto June 2019 when the bankruptcy and all the defaulted debts in it will disappear from your credit record.
Emma W says
Thanks for the reply. We have found mortgage lenders that will accept applications who are 3 years discharged (nationwide) and 4 years (skipton) for June but they also have rules on no defaults in a certain time period so that is why I was wondering whether they would go off default/satisfied date or the fact that there seems to be a balance from last month on Experian for one particular lender.
Thanks, Emma
Anthony Karim says
I have a defaulted debt from 17/04/12 and the company has updated it on the 02/02/2018, does this mean that it will be on my account for the next six years? My debt is £460 so not huge but I still do not have the spare cash to pay it in full so would a monthly payment Improve my ability to obtain credit once it is paid off?
Sara (Debt Camel) says
“does this mean that it will be on my account for the next six years?” yes, read https://debtcamel.co.uk/debt-default-date/ and see if you have a case to ask for the default date to be changed to an earlier one.
“so would a monthly payment Improve my ability to obtain credit once it is paid off?” probably – it depends on the lender but most prefer a default to have been repaid.
amy says
hi,
I had a very Shop Direct account. I was paying this off via a debt management company until july 17.
I re took this account over myself and proceed to clear around 20 per month off the balance. balance was around 150
in September 17 I made a payment of 10 at the beginning of the month, I then proceeded to make the following payment
29/09/17 10.00
06/10/17 10.00
16/10/17 10.00
06/12/17 35.00
I got payment confirmation emails for all these payments, however very never took the payment from my card.
I later found out this was because they sold the debt which was for around 80.00 at this point to Lowell.
upon finding this out I paid the full account of to Lowell In December. Lowell have closed the account and updated my credit file.
Very however, recorded a default in sept 17 and still have a balance of 79.00 showing on my credit file.
they have advised that they wont remove the default or show as settled as they sold the debt.
They have said the balance and default will both remain.
is this right that the balance should remain on my account and the account will not show as settled
Russ says
I had a CCJ on my file and finally after 6 years it has been removed, which is great.
What’s not so great is that my actual credit score hasn’t budged in the slightest. The actual score in Experian & Noddle is still as low as it was when there was a CCJ on my file.
It dropped off about 2-3 weeks ago & it’s 100% not there any more.
Will my credit score actually go up and if so how long does it take to generally kick in?
I don’t want to start applying for credit to build on my score in case I get refused and it goes against me.
Sara (Debt Camel) says
What other problems are still on your credit record? Any defaults?
Russ says
It states a default from Virgin Media, but I’ve flagged it with them as it’s incorrect & have been with them for years. That should go within a couple of weeks (so they say)
Still though, my experian credit score is sitting at 310 out of 999 and I can’t imagine an incorrect Virgin account would impact it so highly.
I also have Noddle which doesnt pick up the Virgin account and that’s equally as but yet squeaky clean now the CCJ has gone.
Sara (Debt Camel) says
Well a default is bizarrely more damaging for your credit score than a CCJ. See https://debtcamel.co.uk/credit-score-change/. When that has gone, go through your Experian record line by line to see what the remaining problems are.
Nicola says
Hi Sara,
I am in the process of getting g my mortgage in place but I have a default on my account from Dec 2015. The account was sold on and I was on a payment plan since the default and it has now been paid off in full.
I am trying to obtain a mortgage but the default is causing me issues. It was in 2015 but it says default right up until now on the chart on my credit file but I haven’t missed any payments aince the original date. Is it worth calling the company up and asking why and if this can be removed?
Thanks
Sara (Debt Camel) says
No, this is normal. Once there is a default that always remains the status. This debt needs to be repaid as soon as possible if you want a mortgage!
Michael Watts says
Bit late to the party here but something is confusing me about my credit report…
I have two accounts that did default and are now under a collections company, I have never missed a monthly payment that was agreed with them, however according to my credit report it’s showing as defaulting every month? Or is it still showing as A default account not renewing as a new default each month?
Sara (Debt Camel) says
Once there is a default on a debt it will always be reported as defaulting every month, even if you keep to an arrangement with a debt collector.
Conor Ferguson says
Hi Sarah,
Was wondering if you might be able to help with a slightly complicated query. Have had to put in 2 parts so apologies for the length of it…
1/2
In September 2015 and July 2016 I took credit cards from both Virgin Money and MBNA respectively. Both were secured at competitive interest rates (18.9% APR with 0% on balance transfers for 2 years) as I had a strong credit rating with no negative information recorded against my credit profile. I was also able to secure a Mortgage in December 2016 with Nationwide to the value of £162,441. As the special offer rate on my Virgin Money credit card was drawing to an end, I began taking steps to secure a new credit card that would allow me to transfer the existing balance from the Virgin Money card to a new one. During this I was unexpectedly declined by Barclaycard and so I acquired a copy of my statutory credit report on 27/01/2018. I discovered that at some stage between July 2016 and January 2018, Scottish Power had added a “Default Notice” and Scottish Gas had added an “Arrears Notice” to my credit profile, relating to an address I had stayed in from August 2011 – June 2012 during my final year at the University of Strathclyde (Flat 0/4, 2 Hanson Park, Glasgow, G31 2HA). The date of the Default Notice from Scottish Power was listed as 28/01/2013 and the Arrears Notice from Scottish Gas appears to be from February 2012……
Conor Ferguson says
2/2
On discovering these two negative records on my credit report, I contacted Scottish Power via email on 13/02/2018 and Scottish Gas via email on 01/03/2018, asking them to substantiate these notices with the original statement of account and a certified copy of the original default/arrears notice respectively. I also requested that, in the event they could provide the documentation requested, that they removed the default and arrears notice from their records as unsubstantiated withing 28 days and updated the appropriate credit reference agencies accordingly. Scottish Power have since responded and attached letters they sent at the time however I moved out of the property in question in June 2012 (after graduating) and the earliest date on any of the letters from Scottish Power is 1st August 2012, 2 months after I moved out. They also advised they had sold the debt on to Buchanan, Clark and Wells on 28th September 2014 so they can’t do anything about it now. Scottish Gas have still not acknowledged my email from 01/03/2018 or the follow up email I sent on 21/03/2018.
The Default Notice and Arrears Notice are both having a severely negative impact on my credit rating and are still preventing me from securing a new credit card. The interest free period on my Virgin Money credit card has now expired and I am paying a significant amount every month to cover the increased interest charge. I would very much appreciate your advice, do you think there is any way I can get these defaults removed? I’m happy to settle the debts if it gets rid of them even though they are beyond the 5 year limitation in Scotland.
Sara (Debt Camel) says
Settling the debts will not get rid of the defaults – you would need to discuss whether they are past the statute of limitations in Scotland with a Scottish Adviser (or call National Debtline https://www.nationaldebtline.org/S/Pages/default.aspx)
You haven’t given any reason why the defaults should be removed. Did you ask for final bills and pay them? did you give either company your forwarding address? did you leave a direct debit in place to them and it was not used?
Conor Ferguson says
Hi Sara,
Thanks for the quick reply.
I believe they have both passed the statute of limitations as it is 5 years in Scotland rather than 6 years in England and Wales. The Scottish Power Default appear to have expired in January this year however having spoken to CallCredit it is still having an impact on my credit score. It’s difficult to be sure as it was so long ago but I believe I would have been paying by direct debit as that’s how I have set up all my other bills. I left a forwarding address with the property owner/landlord when I moved out in June 2012 but didn’t receive any communication from Scottish Power or Scottish Gas at the new address. Is it not quite strange that the notices didn’t appear on my credit file for 3/4 years after the default/arrears should have been registered against my name? As I say I was able to get 2 credit cards and a mortgage at competitive interest rates from September 2015 to December 2016 without any issues. I could be wrong but I would have thought that would have been very difficult if those notices had been on my credit file at the time? I was wondering if I might have some potential recourse because it took them so long to put the notices on my file? Thanks again for your help, I’m not sure what my rights are (or if I have any!) so I do really appreciate it. Tried calling National Debtline but was on hold for 20 minutes and had to get back to work! Will try them again though.
Sara (Debt Camel) says
” It’s difficult to be sure as it was so long ago but I believe I would have been paying by direct debit as that’s how I have set up all my other bills.” Talk to your bank and find out when you cancelled those direct debits.
You could also send a Subject Access Request to Scottish Power and Scottish Gas – that may give you more information about what happened around the time you moved out. At the moment it costs £10 but it’s free from May 25th, see https://debtcamel.co.uk/free-access-data-gdpr/
“I was wondering if I might have some potential recourse because it took them so long to put the notices on my file?” not really, not if the defaults comply with the ICO guidelines, see https://debtcamel.co.uk/debt-default-date/.
Amber M says
Hi
Just looking for some advice. My current Experian score is very poor, I have 2 defaults on my credit report which I have paid both off at the beginning of March. One default from 2013 and one from last September. I have a credit card that I have now paid in full. My partners credit score is very good and we are now completely debt free (apart from car on finance) we have approx 10% deposit for a house and wondering what are the odds on us being offered a mortgage. We currently have a mortgage advisor who we have had since last September and he’s not once said we won’t get one, he just always says to get the best rate we need to do x y & z…
Sara (Debt Camel) says
You were seeing a mortgage adviser in September last year and the same month you had a new default, which you have only just repaid? If that’s right, the chance of you getting a mortgage in the next year or two at anything other than a very high-interest rate is very low. If you mortgage adviser hasn’t told you this, either he is hoping for a large commission from a poor credit lender or he is useless and you need a better mortgage adviser. Sorry.
Dave P says
Hi,
My current experian score is 775 (fair) I’ve managed to increase the score by 200 points in three months by reducing the balances on my credit cards. I currently have one default on my file (paid Aug 2017) which is due to drop off in October 2018. How many points can I presume the score will rise by 100? I would like to apply for a mortgage next year and want the best possible chance of approval for the best deals.
TIA.
Dave
Sara (Debt Camel) says
See https://debtcamel.co.uk/credit-score-change/ which has some numbers.
Sarah says
Hi in 2014 my credit card company sold my debt off to company, I agreeda monthly amount and have never missed a payment. on my credit report every month since 2014 I have got a default. Shouldnt it have flagged as agreed settlement or something it looks like ive just ignored it what can I do please help
Sara (Debt Camel) says
Once a default is added, every month will show as a default even if you keep to an agreed repayment. The balance should be going down each month so it’s clear you aren’t ignoring it.
The record will drop off your credit file in 2020 – but you will need to keep paying if it hasn’t been settled by then, see https://debtcamel.co.uk/paying-old-debt/
Sarah says
So do I contact the orginal lender to ask them to adjust the amount on my file? or the debt collection it got sold to? thanks
Sara (Debt Camel) says
the debt collector – they own the debt so they should show an accurate balance.
Tim says
Good Morning Sara,
I have a question in relation to paying defaulted accounts and have a question for you.
I have 5 defaults on my account and the total of all 5 is under £800 my question is have you ever heard of companies having sympathy for anyone with a default and potentially removing them?
The reason i ask is that my latest 2 from 2017 are preventing me from getting a mortgage however i went through a struggle supporting my younger brother due to my parents divorcing. the defaults in 2017 only amount up to £300 which i settled last year also.
is it worth me writing to these companies asking if they could agree to removing the default and then i do the leg work with Experian and the credit bureau or is that a waste of time?
Sarah says
Just spoke with Barclay card who the original debt was with told them that even though I have paid monthly instalments to the debt company the orginal amount is still the same and looks like I have never made payments, they said they are under no obligation to change the balance on my credit file, the original balance was 2500 its now 1000 so because they wont update the amount looks like i owe more short term debit ive spoke to five people today who wont help me
Rach says
Hi.
I’ve checked my credit report today and I am in need of help. I stupidly took out payday loans back in 2014 with Myjar. I took out 5 loans, every month and couldn’t afford the last one so the balance remains outstanding.
On my clear score report, that I check eaxh month, the Myjar showed as a closed account with a balance of 297 (for a 200 loan) We are in the process of now saving for a mortgage and after paying to check my Equifax report on there the last loan is not showing as a default, which is what I expected it to be. Instead it says it’s in arrears and they have been updating it each month with the same number 1 code. There’s no default on at all and it says periodical payment, not monthly for the last loan. I am now panicking as the mortgages we are looking at says no defaults in 2 years. Previously as I thought the account was closed and defaulted in 2014 I assumed that this would be the case.
What would the effect of the in arrears mean? Can I request that Myjar change it to a default back when I did default in 2014? I’ve had no correspondence with Myjar since 2014 and not been chased etc for this payment. I can pay off the balance but I’m worried as to how this will then show on my report?
I’ve also read the article in reagrds to challenging these payday loans for affordability, if you do this successfully does the debt still remain on the credit reports, or will they be taken off?
Any help or advice will be appreciated.
Sara (Debt Camel) says
Arrears on a credit record for so long and unpaid are very likely to be a huge problem for a mortgage application.
You can ask for Myjar to add a default to your account back in 2014, see https://debtcamel.co.uk/debt-default-date/ which has a letter. BUT even if this is done and you repay it now, this is still very likely to be a problem for getting a mortgage as most mortgage lenders want defaults to have been paid at least a year before an application.
A successful affordability complaint will result in either the whole debt disappearing from your credit record or arrears/default markers being removed. I would suggest this is a good option for you at the moment.
Rach says
Thanks so much for the advice. I will certainly go down the route of contacting the payday loans to try and get this settled. Many Thanks, Rachel.
sam says
Hi
I had two defaults in 2012. one i made formal payments to for a year and the other i never touched but mointored.
The one I never touched have written saying they have closed the account and will no longer pursue. The other one I have heard nothing.
They are both still showing on my credit report and the original debtors (with zero balance)
As it has been 6 years should they be removed from my account? Do i need to contact the debt company’s? For the debt I made payments will this be removed or has the period extended
Thanks
Sara (Debt Camel) says
Do these debts have a default date on your credit report?
sam says
Hi Sara
Thanks for your reply. I am using clearscore and can not see a default date, though pretty sure I saw one in 2018, so this may be because clearscore is free. Could you recommend which credit agencie, free or not free, would provide the most details ie the default date or may there not be one
regards
Kate says
Hi.. I have paid a default loan off last yr. It says settled on my credit report. My credit report on clear score is 339… the default is due to come off in July this year. I’m in a different relationship and want to get a mortgage once the default has gone. He has a great score. Will my score improve dramatically once this default is lifted or will I have to wait? I have nothing else just my credit cards which I’m on top of
Sara (Debt Camel) says
if this is the only problem on your credit record, your credit score should jump immediately it disappears. Have you repaid this debt? And have you also checked your other credit records – see https://debtcamel.co.uk/best-way-to-check-credit-score/ /
Brian says
Hi,
I have the following debts that have defaulted in September and August last year:
Cabot – £2874.43
Robinson Way – £904.31
Lowell – £199
£1253.42
1717.84
I set up a plan to pay all of these by July 2019 with the collection companies.
Reading all the comments have left me feeling a little disappointed in what position I will be in come July 2019 when the debts are paid off.
Will it be possible at all to get a mortgage say the end of 2019/2020?
I will be receiving a massive financial boost with inheritance of of around £7000 due to come in the new year 2020 and I need to use it to put a deposit on a house.
Will this help me to be technically debt free and have around £10,000 to put down on a mortgage?
Any advice would be massively appreciated.
Thanks,
B
Sara (Debt Camel) says
This other article look directly at your situation https://debtcamel.co.uk/mortgage-recent-defaults/
sam says
Hi
I have a debt with a default date 30/04/2012 but I was paying the debt for about a year then stopped as the default would always be on my file in any case. Will the debt drop of in 2018 or will it extend to 2019 as I was paying it for a year?
Do settled accounts affect your credit score
Thanks
Sara (Debt Camel) says
This debt will drop of your credit record at the end of this month whatever you do, pay it in full, settle it with a full and final offer, start making small payments to it or ignore it,
Paying a debt with a default date does not extend the time it is on your credit file. And a debt which has dropped off does not affect your credit score. That is the good news.
The bad news is that even when the debt drops off your credit score is still at risk. Because you last made a payment in 2013 sometime, it will not become statute barred until six years after you missed a payment to it. Until then the lender can take you to court and get a CCJ which would ruin your credit score for another 6 years. See https://debtcamel.co.uk/debt-not-on-my-credit-file/.
Luke says
Hi Sara,
I have five defaults two of which were 2017 and three are around 4 years old. the total value of all my defaults combined is less than £900.00
I was a stupid 17 year old and didnt pay my bills! one was for £41 and the other was £18 – How that has come back to haunt me now 10 years later.
my credit score is 453 but i am unable to get a credit card too build it any further at the moment.
Do you think i am likely to get approved for a mortgage with a £20-30,000 deposit? My partner has an impeccable credit score/history.
Any advice is appreciated.
Luke says
Further to my comment above we are looking to do shared ownership and the deposit covers the % required and the property would be around £280-300,000 however we would go for a 50% deposit.
we earn combined £54,000 per year roughly.
Sara (Debt Camel) says
“I have five defaults two of which were 2017 and three are around 4 years old. …
I was a stupid 17 year old and didnt pay my bills! one was for £41 and the other was £18 – How that has come back to haunt me now 10 years later.”
Are you saying that 2 debts that you didn’t pay 10 years ago have defaults dates of last year? What sort of debts were these?
Luke says
Sorry they were phone bills and a phone on finance and i paid small amounts each month and these two defaulted in 2017. (Total default cost of these two £59)
I have one default which is due to drop off in September this year and another to drop off in June next year.
and the last one is only a year old.
hh says
Hello, wondering if anyone has any advice.
I had a Capital One credit card once upona time that i defaulted on. eventually it ended up with Fredrickson’s who i have been paying 25 quid a month to since january 2017 without missing a payment. very keen to get all financial trouble behind me. so looked at my credit rating on noodle and it is telling me that every month since then i am getting a default on my credit rating. so i called fredrickson and they said it has nothing to do with them, c1 sends that information. called c1 and they said that it will continue to default until the total balance is paid off, which wont be four around another 18 months. so essentially i am paying every month but getting a default for non payment every month and c1 wont do anything different.
how to solve this problem?
cheers
Sara (Debt Camel) says
Capital One can’t do anything about this. Once a default has been added to a debt on a credit record another one is added every month. But these monthly extra defaults don’t affect your credit score.
sam says
Hi
My default has been removed after 6 years. But I kept paying off for about a year, so I believe it is not status barred. What would be the best way to check without extending status barred, if I contact the company will that reset the status barred
Thanks
Sara (Debt Camel) says
If you paid for another year it is not statute barred until it is more than 6 years from the time you stopped those payments.
If you ask the company during this time it is very likely to reset the clock so don’t do this!
See https://debtcamel.co.uk/credit-record-good-news-bad-news/ for this sort of situation.
sam says
Hi
For status barred debt if they were to apply for a CCJ or anything would I be notified first? I believe even if I get a CCJ I can appeal or pay after a month. Just wary not to reset the clock. My letters will be sent to my family home so will be checking at least once a month
Thank
Sara (Debt Camel) says
Court papers will be sent – but you have to reply to a court Claim Form within 14 days or judgment is automatically given against you… so checking once a month isn’t good enough. It really has to be every week!
Technically you can’t appeal – that’s only possible if the judge made an error of law, not if you didn’t defend the case. But you can apply for a “set aside” (sorry if this sounds as though I am quibbling, but it’s good to try to understand the different bits of legal jargon you may come across.) Applying for a set aside costs you £255 unless you are on a very low income… so it’s best to try to avoid this.
How long is it since you paid the debt you are worrying about? What sort of debt is it?
sam says
Thanks for the info.
I started paying the debt for about a year maybe end of December 2012 to december 2013 I believe. Then I was told it would not make a difference to my credit if I paid or did not as only difference would be after 6 years when the debt drops off but I did not realize as I had paid this resets status barred.
It was overdraft of £1000 pound, closed my account when I went travelling as a large payment came out and I was not monitoring the account, by the time I came back Halifax had sent it to debt collects and was too late. Halifax have the account as settles and the debt collectors but on the default. In a position to get a mortgage in the next year and really dont need a ccj as that will set me back other 6 years
regards
Sara (Debt Camel) says
When is the default date for this on your credit record?
sam says
default date is 01/05/2018. It has been removed from my credit report
Thanks
Amita Bhandari says
Please can I ask a simple question, I have a debt of £1400, which shows on my credit history as default but I am hoping to settle it now with some family help. If I negotiate with them for a settlement amount, I have been told that it will come up as partial settlement on the credit report.
My question is will this partial settlement effect my score and credits to me or it does not matter? What type of creditors actually look at avoiding giving credits to partially settled account holders? It will be very helpful, if someone can help. I am just thinking is it worth negotiating if it will not effect my credit score?
Sara (Debt Camel) says
Your credit score will not improve if the debt is settled, whether this is done partially or in full.
But other lenders are more likely to lend to you if your debts have been settled.
A few lenders may decline you because there was a partial settlement but would hav accepted if there was a full settlement.
How low the settlement is matters to you. If you can settle 1400 for 500 that is a lot offg. But if you are only being offered 1200, is that a big enough saving? And are you likely to need more credit?
Amita Bhandari says
Thank you for your reply! Its really helpful!
But if that’s the only debt, will it not improve my credit scores? If not, how can I improve it?
Sara (Debt Camel) says
As I said, settling a defaulted debt does not increase your credit score. It means you can’t be taken to court for a CCJ. And some lenders will be more likely to lend to you once the default is settled, see https://debtcamel.co.uk/improve-credit-score-mortgage/ for example.
Sian says
Hi Sara, find all your articles and advise very useful. Just a brief explanation, I have 3 defaults on my credit record, two dated 2013 one 2014. I had another but settled this at the end of last year as the 6 year mark was looming, this has now disappeared from credit file. I am now looking to offer full and final settlement figures to the remainding 3, I have not made any payments since 2013 and 2014 (originally had set up payment plan but due to one reason or another simply could no longer afford them) so my question is do I need to offer these settlements to the original creditors (NatWest overdraft, NatWest credit card and Vodafone) or to the debt collection agencies whom were my last point of contact in 2013/2014? My credit score shows the debts with NatWest and Vodafone still and not the debt collection companies. Sorry for the long winded question, my last default that I settled was still with original company so did not have this issue. I would not want to simply pay off the wrong company and still have the original debt showing as still unsettled on credit file and the risk of them applying a CCJ as the 6 year mark approaches. Thank you for any advise you can offer, Sian.
Sara (Debt Camel) says
Contact whoever is showing on your credit record as owning the debt now – if they aren’t the owner they should tell you who is.
Sian says
Thank you very much, that’s the confirmation I was looking for, Sian.
Hayley says
Hi,
I would really like some advice. We had our house repossessed around 6.5 years ago. We moved by the date requested and have heard nothing since. Last week we had a letter from a debt recovery agency who have bought the debt. The original debt is no longer on my credit file. My question is does this still fall under a mortage debt and so lasts 12 years rather than 6 or now it has been sold is it a debt and the 6 year limit stands? Also if it is still 12 years can it go back on my credit file with the new agency that has bought it? Any advice would be greatly appreciated.
Sara (Debt Camel) says
This is complicated because some mortgage lenders have different policies, so I suggest you call National Debtline (https://www.nationaldebtline.org/)and talk about your specific lender.
You can’t assume that this debt can no longer be collected at it is past the 6 year point – being sold doesn’t make a difference to that. But the debt should not appear on your credit record again.
Will says
HI Sarah,
I had about 5 defaults back in 2013 and i am now in talks with them for Final settlement and also in the process of checking CCA, i was in DMP and now for past 2 years i stoped paying. I had a Amex card as well, but when checking the credit reports from 2013 I cant see them defaulted me. Also i never received any letters to my new address, i moved about 4 years back. other lenders tracked my address and i am corresponding to them.
What should i do to Amex? Why did they not default me? Is there a chance for them to default me now?
Thanks
Will
Sara (Debt Camel) says
Do you have late payments on the Amex debt? Do you know when you opened the account? And may you have had PPI on it?
Will says
I had a balance of 9k back in 2013, till 2016 i was making payments via DMP to different company who was managing the Amex debts, I am not sure if they sold the debts or not. I stopped paying for last 2 years, but i cannot see the records at all in Equfax or in Experian or noodle. How ever i can see Amex searched me in the searches sections last year.
Account was opened in 2006, I think I had PPI for a short time, when I claimed it through a PPI company back in 2013 I got like £30 back. Also, Can they issue a CCj without defaulting me when i missed the payments either in 2013 or 2015?
Thank you so much for your replies.
Sara (Debt Camel) says
“Why did they not default me?” It’s hard to guess why a lender didn’t do something!
“Is there a chance for them to default me now?” yes – you haven’t made the contractual repayments so they can add a default to your credit record and they can also send you a Default Notice which is required before they start any court action for a CCJ.
If they do add a default to your credit record, you can ask for this to be backdated to 2013 or (at the worst) 2016 when you stopped paying this debt through your DMP.
“Can they issue a CCJ without defaulting me when i missed the payments either in 2013 or 2015?” yes, they have to send you a Default Notice first but this is a simple letter and you may have been sent it years ago already. They don’t have to add a default to your credit record.
Because the debt is so old, it is definitely worth asking them to produce the CCA agreement before offering a final settlement.
will says
Hi Sara,
Thank you so much for the reply. I am so confused now, i m actually in the process of dealing with 4 more creditors requesting CCA and trying to get in to a agreement, All my defaults will drop from my credit file next year mid.
With this Amex, I didn’t want to wake them up by sending a CCA, as i read Amex is very good in keeping the records and also dont sell the debts. Also they dont have my new address for past 5 years and had no letters sent.
Q- If they have already issued default letter back in 2013, can they issue another one?
Q- Just in case they didnt, and if they issue one now, what are the chances i could fight back to back date to 2013?
Please help as i have planning for a fresh start once all m defaults drop in 2019, but i dont really want AMEX to come in place.
Thanks
Will
Sara (Debt Camel) says
You are confusing two different things.
Before Amex sue you, they would have had to issue a Default Notice. If they did that back in 2013 they could go for a CCJ now , they don’t need to do it again.
This has NOTHING to do with adding a default to your credit record. I don’t know why they haven’t done that but they can now. If they do it can definitely be backdated to 2016, back to 2013 may be possible.
But if you don’t pay this debt you are likely to get a CCJ. Which then wrecks your credit record for another 6 years. You could cross your finger s and hope they forget about it, but the recent searches suggest that they haven’t. If you last made a payment in 2016, then this debt will not be statute barred until 2022.
will says
Thanks for the reply. Amex havent located my new address, I am worried if they sent a default or even a CCj letter, it will not reach me. Other lenders have some how found my new address, Should i just call Amex and give them my New address, Is this going to make them come on my back again?
If they issue a CCJ or default in my previous address, Can i defend it in court?
Thanks
Will
Sara (Debt Camel) says
I think you should phone National Debtline and talk through all your options with them – 0808 8080 4000.
Michael Wellington says
I have an issue with a number of small defaults registered by Hutchinson 3 mobile.
Values are only for 2 x £60 each so I’ve been trying to pay them – both dated just over a year ago.
3 have stated they have written off the value so there is nothing outstanding on my account, but the defaults still have a value attached to them on my credit record.
I’ve submitted a formal complaint as I want these satisfied so I can look at getting a mortgage in the next few years.
Where do o stand on this?
Sara (Debt Camel) says
If they have written off the amount, the balance showing should be zero and they should be marked as closed eg by showing as partially satisfied. If if isn’t, this should be corrected and a complaint is the correct way to proceed.
Nick says
Hi
In 2014 I was in financial difficulty and had no option but to default on about £80K of credit cards and loans. In 2016 my financial circumstances improved significantly and in 2016-17 I was able to make final settlement of all but one of these with part payment of 35-50%. The exception was a John Lewis Partnership Mastercard debt of £9K where I contacted them several times in 2016 with a settlement offer, but heard nothing back. According to my credit report files this debt was marked as settled in 2016 so I did not bother chasing JLP further as I assumed that they had written it off.
JLP have now, 2 years on, written raising debt repayment.
My question is whether it is possible for JLP to do this after credit reports from all credit agencies have shown it as settled for the past 2 years? Presumably the agencies would only have done so on information from JLP?
Any thoughts much appreciated, thanks.
Sara (Debt Camel) says
Legally your debt still exists even if they made an error with your credit record. You could however put in a complaint to them saying they are not treating you fairly, point out you had no response to your emails/letters in2016 when you tried to settle your debt so you assumed that it had been written off as they changed your credit records to show it was settled. Attach copies of your 2016 communications and your credit reports to prove this.