A reader has asked how Full & Final settlements (F&Fs) would affect her credit rating which is currently looking good as her debts were all defaulted and have dropped off her credit record.
A full and final settlement happens when the creditors agrees to accept an amount which is less that the total owed to settle a debt, and agrees that the debtor will not be pursued for the remainder. For more details, see this Guide to Full & Final settlements.
This article looks at how F&Fs are shown on a credit record in the two different situations:
- where the debts are still showing on your credit record, and
- where the debts have already disappeared.
Lenders often say that a partial settlement will be very bad for your credit record… but often it won’t be! So it’s good to know all the details.
Some different names for this
F&F settlements are often called partial settlements, because you don’t pay the full amount, only part of it.
Creditors usually mark the debt as partially settled on your credit record rather than settled.
If the debt has previously defaulted, the term settled is not used and the term satisfied is used instead. A F&F settlement on a defaulted debt is then marked as partially satisfied. I talk here about settled debts because that is is how creditors normally talk to you, even though the credit record term is normally satisfied.
Debts that still show on your credit record
When you settle debt, partially or in full, the balance is set to zero. The debt will then disappear from your credit record six years after the original default date.
If the debt hasn’t defaulted, it will disappear six years after the settlement date. But it is unusual for a creditor to accept a F&F unless a debt has defaulted. You may want to ask for a default to be added, see What should the default date for a debt be? for more about this.
It is common for a creditor to tell you that the debt will stay for six years from the settlement date.
This isn’t right if there is a default date on the record! It will drop off six years from the default date whatever you do.
How does a partial settlement affect your credit rating?
Your credit score is a complicated calculation looking at lots of different factors.
Partial settlement is a marker against a debt, That marker isn’t taken into account in the credit scores published by Experian, Equifax and TransUnion that you see when you look at a credit report.
Lenders don’t use the credit scores that you can see. Each lender can have their own rules about what is on your credit record that they want to take into account.
So it’s possible a lender may see a partial settlement marker and decide not to lend to you. This is only really likely though for very large credit applications – mortgage or car finance say.
Most lenders won’t care if you have partially settled the debt. They may think it’s good that a debt is gone – because with one problem less, you are more likely to be able to repay what you borrow from them!
And some lenders will reject you just because there was a default, even if you have settled the debt in full!
So it can be hard to decide if paying the extra money is worth it – there may only be a tiny number of lender that may make a different decision if you partially settle or fully settle a debt.
Think about the size of the discount you can get and how long the debt will stay on your credit record. For example:
- if the creditor will accept £500 to settle a £1,500 debt that is a big discount. And if the debt will drop off in the next year, it’s probably a good idea to grab it!
- if the creditors will only accept £1,300 to settle that £1,500 and the debt is still going to show for another four years, you may think it’s worth paying more to get the debt marked as fully settled.
The rest of your financial position also matters:
- with lots of problems on your credit record, getting one debt marked as partially or fully settled probably won’t make much difference at all;
- if you can’t afford to repay all your problem debts, it’s usually better to settle as many as possible partially, rather than take longer to repay them in full.
Wanting a mortgage is the most difficult situation – I look at it in detail in Will partial settlement make getting a mortgage harder?
Debts that have disappeared from your credit record
A defaulted debt drops off your credit file after 6 years, which is why the questioner is no longer seeing these old debts on her record. But would settling one bring back the debt? You can see why she wouldn’t want her new, clean credit record spoiled by having some partial settlement indicators added to it…
The answer is simple – after a defaulted debt has gone from a credit record, it will never re-appear. You can offer a F&F settlement on these debts and not risk them coming back and damaging your credit score. If a creditor tells you that a partial settlement will be shown on your credit record for another six years, they are wrong.
This also applies to CCJs that have dropped off after 6 years. They will not reappear if you settle them with a partial settlement.
Once a debt with a default or a CCJ has gone from your credit file, the only lender that will know about it the original creditor. So don’t make the mistake of applying for a mortgage to NatWest if you originally defaulted to RBS, or to Halifax if you defaulted on a Lloyds debt.
Unfortunately people are often given wrong information about this by customer service staff at debt purchasers.
Why offer a F&F if the debts have disappeared?
You might wonder why the questioner would bother making Full and Final offers on debts which have disappeared from a credit record. There are two reasons why trying to settle old debts is a good idea:
- a debt that isn’t showing on your credit record still exists. Unless it is statute-barred the creditor can still chase you for the money. See Do I still have to pay a debt which isn’t on my credit record? for more details.
- if you apply for a mortgage or a re-mortgage the lender is likely to ask about all your debts, not just check your credit record.
So as defaulted old debts can often be settled for low Full and Final offers, it makes a lot of sense for the questioner to try to deal with hers.
Getting settlements on old debts
No calls about a debt for years?
Improve your credit score for a mortgage
Jane Clack says
what a great article – clearly and simply said!
Stuart B says
Fantastic article and really relevant to my situation. I have 17k worth of debt have received 7k from which im in the process of neg with creditors for a full and final settlement. I am curious and the long term implications these will have on my credit report ? Say if I wanted a mortgage in 5-10 years would this be credit suicide ?
Sara (Debt Camel) says
Hi Stuart, any debts marked as defaulted drop off your credit file 6 years after the default date. Any debts not defaulted will drop off 6 years after the date of the F&F when the balance owing is set to zero. For a mortgage there will be no traces remaining after 6 years. But by the 5 year point your current problems will be looking like old history and you may be fine for a mortgage if you have got a good deposit saved up. See https://debtcamel.co.uk/mortgage-with-debts/ for more details.
Michelle says
what a brilliant website! I am in the process of trying to sort out my finances and have been worrying about defaulted marked debts re-appearing once f&f payments have hopefully been agreed.
Thanks so much for the clarity!
Good luck to everyone
alex says
Thanks very much for your great website and comments.
I have 7 creditors which I have managed to get their agreement of 6 of them to pay 30% for partial settlement. Six years from default date will be due in 2 to 4 months, that’s why I just thought to resolved them to prevent any potential CCJ. I have only one credit left which hope to clear on Monday coming.
When 6 year due and all default dropped from credit report, am I likely to get a mortgage? I do not want when I apply for mortgage mention any debts remains to mortgage broker as to me all been partially settled and would to all balance be £0.00
Sara (Debt Camel) says
Hi Alex, if you have a big enough deposit and income for the mortgage you want, then these old partially settled debts should not be a problem after they have all disappeared from your file. A mortgage lender won’t be able to see them on your credit file and there is no reason for you to mention them as you don’t owe any money to them any more! Good luck with getting your mortgage.
Ryan says
Very good piece, one query I hope you could answer though. If after 6 years defaulted debts disappear of your credit record, and you then agree a partial settlement with a creditor, does the creditor still keep that information on file? For example, if I owed a bank £2,000, 6 years had passed and I settled it for £1,000, if then in the future I went to the same bank for credit, would they still hold that information on file?
Sara Williams says
Hi Ryan, that is up to the bank, there is no legal limit on the time they can keep these for. I wouldn’t plan on getting more credit from them!
Linda says
I have been paying into a DMP for nearly 7 years with another year to go. An opportunity to pay off the debt in full has arisen but I was going to try and negotiate a F&F settlement for each debt. I’m wondering if it will be worth though if this shows up as a partial payment on a credit record. Will both settlement or full payment show on a credit record for 6 years or just the F&F? Any advice would be much appreciated!
Sara Williams says
Hi Linda, check your credit file as DMPs can result in debts being shown in different ways, see https://debtcamel.co.uk/dmp-credit-rating/
So some debts may already have fallen off. If they are still there, are they defaulted? If they are, then the debt will disappear 6 years after the default date whatever you do. If they aren’t marked as defaulted, the debts will stay for 6 years from the full or partial settlement.
adam says
Hi,
1) If a debt is marked as default, does the 6 year timer start when it was marked, or when the balance is at £0?
2) This leads onto my next question, i have offered one of my creditors a F&F payment, however they have said yes, but it will only show as partial settlement. If i only have 3 years left as a marker on my file (if the time started when i defaulted as above), Is it worth taking the offer as this will add another 6 years onto my file.
Sara (Debt Camel) says
Hi Adam
1) the six year timer to drop off your credit file starts at the date of default
2) if you have F&F 3 years after a default, the record will drop off in another 3 years. It won’t extend this to 6. It makes no difference if the debt is marked as duly settled or partially settled.
Sam O says
Hi there, I have 3 debts which all defaulted August, September and October 2009. I have been negotiating f&f settlement recently because I got told by National Debt HelpLine that they couldn’t add a partially satisfied mark on an account which is in default. So when the default runs out at the end of the month my account would be clear. But when I spoke to NDHL today they then told me if I made a f&f payment it would show as partially satisfied for 6 years from date of payment even if the default runs out. I also have been told by a mortgage broker to wait for the default to run out and the account should disappear from my credit file (now I’m very confused!) if this is the case I will still owe the money so if I then make a f&f payment will the account reappear on my credit file for 6 years marked as partially satisfied?
Sara (Debt Camel) says
A creditor can add a partially settled marker to an account in default BUT it will disappear six years from the default date. Not six years from the date of payment. If the debt has already “disappeared”, a F&F will not make it reappear. The advice from the mortgage broker doesn’t sound great – you may find this more helpful https://debtcamel.co.uk/dmp-mortgage/.
Linda says
Hi I have just agreed to pay a partially settlement. The debt was defaulted but has been removed from my credit score after 6yrs. Can this debt be put back on the report for 6yrs. The company has stated that it will be put back on as a partially settled payment and the balance nil. Will this affect my credit score.
Sara (Debt Camel) says
The company is wrong – the debt will not reappear.
If it does, they have made an error. Ask them to add the correct default date – which was over 6 years ago – and it will disappear again.
Clare says
Hi. This website is really helpful. Please can you just clarify I’m going to be receiving a redundancy payment Thursday and I have a debt that is very close to the 6 years. I’m looking to get a mortgage in the next couple years. Do you recommend that I pay the full amount or partially settle, as if its not going to show I don’t see the point in paying in full.
Sara (Debt Camel) says
I would offer a partial settlement – as you say it’s not going to be visible on your credit record 6 years after the original default.
Martin says
Advice please. My wife and I each had a loan in default. These went past their 6 year anniversary at the end of July 2015. The company then offered us a reduced settlement figure which we accepted and paid. They said that they would send a Partially Settled with zero balance statement to the credit references agencies. Am I correct in thinking that because the loans were in default but “disappeared” from our credit files that they will not reappear under Closed Accounts, showing as Partially Settled because they were over 6 years old and had already been removed? The fact that we then partially settled does not make them re-appear on our credit files?
Sara (Debt Camel) says
Hi Martin – yes that is correct. If the loans have already disappeared from your credit files, this partial settlement will not bring them back.
Stephen says
I currently owe £20K on a £25K Secured Loan which was taken out in 2006. Since then I have paid around £18-£20K of payments. I have been gifted £10K from a family member. If I was to offer this to the lender to fully settle the balance and show the account as Fully Settled on my credit report, would they accept this? I don’t want the account to show as full & final setlement and affect my credit score.
Sara (Debt Camel) says
Hi Stephen, I don’t think the partial / fully settled flag on your credit file is your big problem here. The lender isn’t likely to accept a 50p in the £ offer for a secured loan I am afraid.
Alison says
I am hoping to borrow some money from family in order to pay off some credit card debts – what would have the best impact on my credit rating – partially settling ALL the credit cards or just pay off just a few in full? They are all on payment arrangements at the minute and I need to know what would be the best course of action to get the best impact on my credit rating. We are hoping to get a mortgage.
Sara (Debt Camel) says
Hi Alison, there isn’t a simple answer here, it’s not just your credit rating that matters for getting a mortgage … see https://debtcamel.co.uk/dmp-mortgage/
Shaun says
Hi, firstly I would like to say what a great site you have & great advice, which is hard to find as I have spoke to countless people over the phone including my business banking manager & was left a little confused by the different answers.
My problem is I have two defaults on my credit report. One ends Aug 2016 of £200 the other Nov 2016 of £400 so not a massive amount & to be honest easily payable now I am in a better place.
I am wanting a buy to let mortgage next year or year after as a retirement fund rather than a pension & my business banking manager has told me as far as they are concerned by looking at my account it’s exactly what they want to see & I am doing great.
Knowing they come off my credit score I am considering just riding it out & not paying as the £400 one was a family member who got credit in my name (mobile phone) & it took years for me to actually find out. I can aford to pay them no worries but am I better going for a F&F payment as they will be gone next year or just leave it & not pay or since it is such a small amount just pay it in full & be done with it?
I do want to build my credit score but will paying it help?
Many thanks
Sara (Debt Camel) says
Hi Shaun,
not paying risks a CCJ – a bad idea! 6 years after the default, they will disappear and your credit record will be the same whether you settle in full now or with a F&F.
Shaun says
Hi Sara,
Thanks for your quick reply, I really appreciate it.
So I am better paying it but is it better to F&F or just pay it in full? Also will paying it in full increase my credit score or will I need to get a little finance or a credit card or something to do that? As a little debt wouldn’t faze me now as I am in a very good financial place now, it was just some really simple mistakes when I was a bit younger but I am paying for it now. Luckily its only hundreds but its still had a massive impacted on my score.
Sara (Debt Camel) says
At this stage there Is unlikely to be much difference if you pay in full or partially for the short period until the debts drop off because the default markers will still be visible. NB all lenders do their own scoring, so it’s possible some may care but I don’t think most would. After the debts drop off next year there will be absolutely no difference at all. To repair your credit rating, get a ‘bad credit’ credit card, use it every month for something small and set it up to repay in full every month automatically.
Tim Flowers says
Hi,
My mum currently has two credit card debts one £4.5k and one £4.2k. There haven’t been any payments made for over 4 years. First defaulted around 6 years ago. I have read on here that the debt will disappear from credit file but should I still make offers to partially settle her debt? Or just leave it? Thanks
Sara (Debt Camel) says
Hi Tim, this article addresses this sort of situation: https://debtcamel.co.uk/no-calls-or-letters-about-debt/. If your mum feels worried about this, my guess is that her creditors would probably accept a pretty low F&F offer from you now.
Darren says
Hi Sara,
I was made redundant about three years ago, and was not able to continue paying various creditors the amounts owed on a monthly basis. I took advice and offered minimal monthly payments which were accepted, with the majority registering defaults on my account.
Things have moved on, I am now employed, and in a position to settle the majority of the debts. However, when I contacted one of the companies for an account balance, they offered me a discounted settlement figure of approx 35%.
I am aware that if I agree to the lower amount, it will show as “partially settled” on my credit file, but is the offer worth accepting if everything else is paid in full ?
Many thanks.
Sara (Debt Camel) says
Hi Darren, the default will remain and the whole debt will drop off after 3 more years (6 years from default date). A full settlement is better than a partial settlement, but with the default there, your credit rating is never going to be good, so it’s a question of weighing up the money saving against the marginally worse credit score. If it’s a small amount of money that isn’t important to you now, then you may as well settle in full. If you are going for a partial, you may as well try to get that for some of the other debts as well. Sorry no simple yes/no answer…
paul says
Hi,
I have a CCJ for a parking fine for £255.00. from feb 2010. I paid £10.00 last year and didn’t pay any thing else after that as I forgot, but the solicietors have not updated my credit file as it still shows £255.00. in addition to this, it was put on my file as a CCJ 24th/02/2010 however, I want to sort my credit file out and be in a better place.. I have been told to leave it as in feb 16 it will come off my file but is it worth trying a F&Fs offer and asking them to update the file if accepted to satisfied as I don’t want to wait until feb 16? also, if this is worth doing how will this effect my credit score..? will it still come off in feb 16? what will I expect to see and how long for..? and will the solicietors put late payments on my file for not continuing to pay the £10.00 per month as agreed? please can you help..? thanks.
Sara (Debt Camel) says
Hi Paul, you are not going to get a F&F accepted for a parking fine with a CCJ. And the real problem is the possibility of bailiffs, not your credit record. I suggest you pay it in full as soon as possible.
Lorna says
Hi Sara
On my credit file I have a joint account with an ex partner which defaulted on 7/5/15. He is not willing to pay a penny to help clear this debt so its left to me. The balance is for £2012.68 and Capquest have offered me a partial settlement of £1509.52. I am unsure whether to accept this and have the ‘partial settlement’ flag on my credit report for the remaining 5+ years just to save £500, or just pay the full amount. If it doesn’t make much difference to my credit report either way then surely the reduced amount would be the obvious option? I am so confused with what to do for the best. Any advise would be hugely appreciated.
Kind regards
Lorna
Sara (Debt Camel) says
Hi Lorna, unfortunately there isn’t a yes/no answer. Yes fully settled is better than partially settled, but the default means that even fully settled won’t give you a good rating. If the default was recent and you are hoping for a mortgage in a few years, then it may be better to settle in full. but if the default was a while ago, then it’s going to drop off after 6 years anyway, so why not save the £500?
DL says
Hi There,
I have the opportunity to settle a debt of £2,600 for £1,700 (F&F). There is still 4 years until the default drops off my credit score.
I would like to move next year and should have a good deposit to put together. Would it be better for this debt to show up as settled in full or will it be looked at in the same way as a partial settlement with a zero balance?
Thanks
D
Sara (Debt Camel) says
Hi DL, I think this falls into the really hard decision category. If you could save £2-3,000 then that would be a good addition to your deposit. Whether a mortgage lender will prefer a partially settled marker to a settled marker is doubtful – lenders may well take different views, with many ruling you out completely because of the recent default on your file.
sonia says
Hi,
I have 2 debts 1 which is 4k and the other is 3k i defaulted on both accounts over 8 years ago and have checked my credit report and both defaults have now gone, i am currently paying both debts back at £30 for 1 and £20 a month for the other, my plan is to get a mortgage in the next 2 years,should i offer a settlement figures for these or should i just keep paying back the small amount that i am? will the mortgage lender be able to see that i still have this debt?
Thanks S
Sara (Debt Camel) says
Hi Sonia, I think you will find this article useful: https://debtcamel.co.uk/dmp-mortgage/
Adrian says
I’ve had a default on my credit file since early 2013 for a £900 balance on a loan. Over the last couple of years I’ve had a couple of debt collection agencies chasing the debt with threatening letters all of which I’ve ignored including one suggesting that I had a time limited opportunity to make them an offer to settle the debt. I haven’t had any contact from these debt collection companies for 6-12 months but still get an annual statement from Santander.
I am now in a position where I can settle the debt but am wondering who to contact? Also if I offered to settle in full could I make it a condition of settlement that the default is wiped off my credit file? What is the likelihood they will accept that as opposed to a F&F settlement in which they will receive less money? (They are a bank after all!) Or am I better off just going for the F&F settlement?
Sara (Debt Camel) says
Hi Adrian, I would contact Santander – they will tell you if you should talk to their debt collector. If you offer to repay the debt in full it is VERY unlikely they will agree to remove the default. Although on an individual debt the bank might gain from this, the banks collectively want the default reporting to be honest as it helps them in their lending decisions. I suggest you go for a F&F.
Maximus says
Hi. I’ve got a wee strange situation here. 1st credit bought some of my debts from Lloyds. They’ve been chasing me with their letters for some time. Those debts defaulted autumn 2010. Now, out of nowhere I found out that 1st credit updated one of my credit files with “settled” flag and with a comment “partially settled” – but I never settled any debt with them. I was told by few people in the past that when you settle/start repaying a debt it will make your default clock restart – which is why I wanted to repay my debts after it drops out of my CF. From your article it show as it doesn’t matter if I settle it now or not (well, I definitely won’t be given a CCJ if I settle them, but I mean any real difference to my credit file), because they will anyway disappear 6 years from the default date… Now the question is, if thats the case, why would the 1st credit update me with “settled” flag?
a) my first thought was they wanted my default last longer to make me repay;
b) it was a mistake;
c) they don’t think they’ll ever get the money back so they simply wiped it out (most unlikely)?
Sara (Debt Camel) says
If I had to guess, i would probably go for (b) …. Hanlon’s Razor applies just as much in debt collection as in other areas of life “Never ascribe to malice what can be adequately explained by incompetence”… https://en.wikipedia.org/wiki/Hanlon%27s_razor
Richard says
Hello there! Couple of questions please? I took out a vanquis credit card in August 2008 to pay for travel to get to Isle of Wight to work for Xmas, i didn’t have a debit card at the time and had to send the money up to my dad Who did in cash, but he didn’t tell me he used the money to pay energy bill which I’m still angry with, also hid the letters when I got back. It defaulted in 2009, it was then past on to lowells but some reason they put a default on my file in 2012 but I’ve not paid anything since 2008 so how have they done that? Also the credit limit was £150 and couldn’t pay it back and now with charges etc is at £1282, is there a way I can fight these charges and do you think it’s likely they would accept a settlement? Thank you so much for you’re help as this is a fantastic site for advice!
Sara (Debt Camel) says
Hi Richard, if no money has been paid to this debt since 2008, it may be “Statute barred”, see https://debtcamel.co.uk/statute-barred-debt/ for more information and as that article says, I suggest you phone National Debtline to discuss the details of this debt with them.
Scott S says
Hi, I have been offered a 40% discount on accounts with Lowell group but will only appear as partially satisfied on my credit record. I have asked them for full and final that can be marked satisfied but they are looking for the full amounts on both accounts. These amounts are twice what my original borrowings where! I have cleared all my debt in 2015 with all accounts marked as satisfied even at 20 and 30% discount. I really want these cleared for 2016 as I’ll be debt free for the first time in 10 years
Sara (Debt Camel) says
Hi Scott, this is a really difficult decision. Lowell are perfectly entitled to refuse to mark a F&F settlement as satisfied. 40% off is presumably a significant amount of money. And there is no way to assess how “bad” a partial settlement compared to full settlement will be on your credit file.
marc says
Had a debt with Halifax 12/4/13 showing on experian with lowell taking on 13/4/13 can I have the Halifax one removed as lowell bought the debt?
Thinking of settling 6224.58 debt they want 3112.29 and say it will be on my file as partial settled is this the norm? Can it be sold on for another debt recovery agency ?
Any advice in regards to covering myself with settling would be helpful thanks
Sara (Debt Camel) says
Hi Marc,
A ‘duplicate’ debt doesn’t matter, this is normal and credit rating calculations only take account of one of them. The two debts should have the same default date – if they don’t, ask Lowells to correct theirs to be the same as the original creditor.
Yes it is normal for a Full & Final settlement to be marked as ‘partial’ as this article discusses.
I don’t know if your discussions with Lowell have been by phone or email/letter. You can’t rely on phone conversations – you want written confirmation that this amount is going to be accepted as a full & final settlement and that they will not sell the debt to a third party.
Lindsey Winwood says
Hi
have just partially settled 2 small debts on my credit file from 3 years ago. I know these will stay on my file for another 3 years, but will they significantly affect me getting a mortgage in the near future?
Also when I spoke to one of the companies, he advised they had another debt in my name which I was not aware of, from around 9 years ago. When I advised that wasn’t on my credit file he said ‘ well it will be soon’. Does that mean they can add it back on now they know where I am?
Sara (Debt Camel) says
Two small defaults 3 years ago now partially settled may well make it harder for you to get a mortgage, how much harder will depend on how large your deposit is, and how much you want to borrow in relation to your income. Also any other debts you have at the moment. See https://debtcamel.co.uk/mortgage-with-debts/ for details.
A debt that you haven’t made any payments to for more than 6 years may be statute barred, see https://debtcamel.co.uk/statute-barred-debt/. And its default date should be more than 6 years ago – if it appears on your credit file with a more recent date, you can challenge this: https://debtcamel.co.uk/debt-default-date/.
Irene Stewart says
I settled a debt with my Capital One credit card 9 years ago with a reduced settlement they offered me. I had no idea there was PPI on the credit card however I got an email a few months ago to check so I made a claim to them. They have said that I am due £395 PPI however as I have a debt with them they’re keeping it. I thought that I had settled it when I paid the debt 9 years ago? Any advice. They are adamant they are keeping it.
Sara (Debt Camel) says
Hi Irene, this is very annoying but I am afraid legally they are right. A Full and Final settlement technically doesn’t get rid of the debt, it just means the creditor agrees not to pursue you for it any more… so the debt still exists that they are entitled to “set off” the PPI refund against it.
Rose says
I have 3 CCJ’s on my credit history. I have been told that 6 years after the default date, which were all in 2010, they will drop off the report. Is this true? I was going to makes offers to pay them off because I was looking to rent a property, but have been told they only show as part settled. Am I as well to keep paying them back at the agreed monthly amount and hold out renting until later this year, when they should not show on my credit record? All sounds too good to be true, please advise.
Sara (Debt Camel) says
The CCJs will drop off your credit history after 6 years, which will make it much easier for you to rent. But they are still valid and can be enforced by the creditor, eg using bailiffs. So it is good to get them paid off as soon as possible.
Rose says
Having read some of you other articles, could you clarify something for me please? My debts defaulted in 2010, but the debts were sold on, after I had tried to make offer of payments I might add. The CCJ’s were raised at a later date, around 2013/2014, by the final debt collectors , in this case, which date will be relevant, the default, or the CCJ as to when they disappear off my record? Many thanks
Sara (Debt Camel) says
If there is a CCJ, this is a separate entry on your credit file. The debts themselves will drop off 6 years after the default dates. But a CCJ will remain for 6 years from the date of the judgment.
Angela says
Hi, hoping you can help….
I have a debt of £3500 showing on my credit file, the account default date is 14/01/2013. Therefore I understand this default will only disappear in 6 years – 14/01/2019.
I would like to apply for a mortgage in the next 12-18 months and trying to decide the best course of action….
If I paid the full £3500, I understand it will show as Settled and the default remains until 2019
BUT
The company have offered by a reduced settlement figure at around £1000 which is much easier for me to tackle, this means my credit file would show as partially settled and default remains until 2019
My question is what impact this would have on a mortgage application – i.e Would it look bad to the mortgage advisor that it was only partially settled? And would this affect their decision over fully settled? As essentially they will see it because the default remains
Thoughts?
Sara (Debt Camel) says
It is impossible to give a clear yes or No here. Many mortgage lenders will reject you because you have a default even if it is fully paid. Some may not care if it is fully or partially paid. There may be a few lenders that would lend if you paid it in full but won’t lend if you settle it partially – but I can’t say how many of these lenders there will be or who they are.
Are you happy that the default date is correct? See https://debtcamel.co.uk/debt-default-date/
Jenny says
Hi,
I partially settled 3 accounts after getting into financial difficulty. I originally defaulted in July 2013 after making lower payments. I then partially settled the accounts in September 2015. Another default was registered on my account for the 3 partially settled accounts. I check my experian most days and I have noticed one of the creditors has registered another default earlier this month.
What is the best thing to do as my credit score keeps getting worse even though I settled them back in September. Also even though they have issued another default this month will it still go back to the September date (partially settled) or July 2013.
Thanks
Jenny
Sara (Debt Camel) says
This shouldn’t have happened. The creditors should have marked the balance owing as zero after your settlement, so no more defaults could be added. You need to put in a formal complaint to the creditor (you can usually find an email address for this on their website). If they refuse, your next step will depend on why they are refusing …
Pete says
I guess it was not another default but Experian shows the Default state every single month… so it doesnt show only in that month when it happened, but shows it in every single month from that point on
Sara (Debt Camel) says
That sounds correct. A default will only stop being added when you have settled the balance. But these “monthly defaults” don’t make your score worse.
The comment you have replied to has the situation where the debt HAS been settled – and then the balance should show as zero and the defaults should stop.
Bruce says
Hi
I have 4 accounts i defaulted on between September 2010 and May 2011. During the period since i have continued to make small payments on each of these accounts every month all of which are now in the hands of debt management firms. My intention is to make full and final offers to each of these at some point in the future and several have already offerred reduced settlements but at amounts i cant currently afford.
My question is that when each of these accounts reaches 6 years from the default date will they still be removed from my credit file as they are showing as being updated every month when i make a payment?
Thanks
Bruce
Sara (Debt Camel) says
Yes they will be. And if you later make a full&final settlement, they will not reappear.
But your creditors won’t necessarily accept any less as a settlement just because the debt isn’t showing on your credit file – it makes no difference to them.
Anne says
Is an email okay as written correspondence that a creditor has accepted a F&F settlement or should their acceptance be on letter headed paper by post?
Also, does the written correspondence need to state it is ‘full and final settlement’ and not just ‘final settlement’?
Sara (Debt Camel) says
An email is fine provided that it comes from an address that is clearly a company email. You need to make sure you don’t delete this email or lose it if you change your PC or email provider. I suggest printing it out and trying to keep a digital copy. ideally for 6 years. Also keeping your part of the correspondence, not just their final letter.
The term final settlement is ok. I suggest (https://debtcamel.co.uk/debt-options/less-common/full-final/) that people use the National Debtline template which says “I am making this offer on the clear understanding that, if you accept it, neither you nor any associate company will take any other action to collect or enforce this debt in any way and that I will be released from any liability.” You need some equivalent wording from them – this is to stop them pocketing your money then selling the debt to another debt collector!
Seamus says
I have 4 debts, all with defaults on. I have agreed full & final settlements and paid off 3 of them. The accounts are showing as settled on my credit report, but this has had no positive effect on my score at all.
I am still in negotiations with the fourth creditor (£1500) and wondered if agreeing to pay the full amount was likely to have a more positive effect than another F&F on my credit file? Also, would it be worth trying to get the creditor to agree to remove the default as a condition of the settlement?
2 of the debts are due to come off my credit report later this year, but the others still have 3 – 4 years remaining.
I am hoping get another mortgage in the not too distant future.
Cheers
Sara (Debt Camel) says
It takes time for credit record to improve. With one unsettled default and three that are only recently settled, I’m not surprised it is still poor.
Paying a debt in full with have a more positive effect but the difference is generally expected to be small. And of course every lender uses their own score, not the credit reference agency score. Some lenders may care, some may not. It is VERY unlikely that a creditor will remove the default as a condition of settlement.
You may find this article useful: https://debtcamel.co.uk/dmp-mortgage/
Nick says
Hi, I have been using a DMP with StepChange for the last couple of years but now have some money which I am using to try and sort my finances out. The main factors against my credit rating are two defaulted accounts, I have a defaulted loan with RBS for £2300, the default date was Nov 14 and also a defaulted credit card with RBS with a default date of September 13, the latter was for £800 and has been paid off in full. I am in the process of offering 50% F&F for the £2300 loan, however as I want to apply for a mortgage within the next year or so and have a good deposit to do so, would it be better to pay this off in full? Thanks
Sara (Debt Camel) says
As that default is so recent, if you really do have a good deposit it’s probably worth repaying it in full. If repaying the extra £1,150 will reduce your deposit significantly, this is a harder decision to take.
Laura says
Hi,
Your advice would be very much appreciated please. We have been paying into a DMP since 2011 after getting into difficulty when my husband lost his job during the recession and I had just gone on maternity leave. We started with £30k debt between us split over several creditors.
Since then my Husband has got a better paid job – currently on £48K and we pay £600 a month. We have £9884 remaining.
My husband has just got a payout of £6k from a car accident.
My question to you is – in your opinion do you think would it be worth offering this as a settlement?(do you think it’s realistic to offer this as a figure?)
We would like to move house (we have 2 kids and currently in a 2 bed house) over the next couple of years so the sooner we can clear this and start getting a deposit together and the defaults further away on our credit score.
If they were to accept the settlement offer would this be significantly detrimental to our credit score? Or are we best to pay the £6k and then remainder of the debt over the next 6 months until cleared?
Hope that makes sense and thanks so much for your help x
Sara (Debt Camel) says
It can be a difficult problem, whether to get a F&F and have partial settlements on your credit record if you want a mortgage soon. In your case I don’t think the creditors are likely to accept a low offer because the debts will be repaid in full in the next 18 months… They may take 75% (a bird in the hand…) but probably not much less. So I’m not sure the small saving would be worth it.
Rick says
Hi
I do not have any defaults at the moment however we only have one income now and I know we will not be able to pay our loans credit cards.
Is it worth writing the the credit cards to ask for F&F as a family member said they will help
Many thanks
Sara (Debt Camel) says
Realistically the lenders are unlikely to accept an offer if you haven’t missed any payments. I suggest you offer them all a relatively low amount – this may be a token £1 a month if that is all you can afford, see https://debtcamel.co.uk/token-payment-debt/. Then revisit the idea of Full and Final offers in 6 months or a years time.
Ally says
Hi if I have been offered a partial settlement by a company who says it will state it’s is partial on the account, but the default was well over 6 years ago. Should I still pay the full amount if it is that company I would want to use as a mortgage provider? Thanks
Sara (Debt Camel) says
Hi Ally, I really suggest going to a different mortgage lender. Even if you repay this debt in full now, they may not be happy with a mortgage application because they will be able to see your previous problems from their own records.
Amy says
I went over to a DMP in July 2010. I have since then made regular payment to all my debtors finally coming to an end in May 2016, never missed one payment. None of the debts have been marked as defaulted.
I wanted to clear a final outstanding balance 6 months earlier than the DMP was due to end. The company excepted a full and final offer, I owed £900 and they excepted £400. In April I had a very good credit score (5/5) and I am now debt free. The company marked my credit file with the previous 6 months as unpaid and then in May partial settlement, my credit score is now back down to 1/5. I have raised a deputed with the credit report agency on my behalf, is there anything else I can do, is this a fair reflection?? I would understand if it went down by 1 or 2. I am so upset that I have worked for 6 years to be debt free and now I am at the bottom again.
Also, the DMP started in July 2010 this July it will be 6 years, will is be removed for the report all together anyway, if this is the case will my credit score go back up??
Sara (Debt Camel) says
This may be one of the odd cases where you would be better off if there was a default date added… if you could get default dates added 6 months after you started the DMP ie early 2011, then the whole debt will disappear 6 months after wards.
See https://debtcamel.co.uk/dmp-end-will-credit-improve/ and https://debtcamel.co.uk/debt-default-date/
Otherwise with no default dates, the DMP payments will continue to show for 6 years from the point the debt was repaid.
Hayley says
Hi. My credit file reflects both good and bad payments. My credit score is very low. I have a current loan, mobile phone contracts and a credit card on which I have never missed any payments, but I also have a number of defaulted accounts on other debts dating as far back as 2012. I also have a CCJ from 2014, I am now financially in a position (with help from parents) to pay off the debts. I know that my credit score will not really change all that much until the accounts drop off my file after 6 years. However, if I pay off my loan in full and reduce my credit card debt considerably, will it go in my favour and subsequently help my credit score if I keep the credit card account open and active and up to date? Also, is there anything I can do in order to have the defaulted accounts removed from my file before the 6 years is up? Many thanks.
Sara (Debt Camel) says
Your credit score is never going to get to be great until 2020 when the CCJ disappears I am afraid.
You could offer partial settlements to the defaulted debts as this article says.
You should definitely repay the non defaulted debts loan in full. Keep your credit card account open and active – the ideal is to be able to repay the balance in full every month. But just getting the balance down will help. These things will mean when the defaults and CCJ go, your credit score should be very good.
It’s unlikely you can have the defaults removed, but I look at all the cases here: https://debtcamel.co.uk/get-rid-of-a-default/
Sara says
Hi, I have a loan that went into default in 2012- I now pay this through a debt recovery agency. It is due to drop off my file in 2018. They have offered my a discounted settlement figure which is around £1000 less than the full amount. I am wanting to pay it off to be able to go for a mortgage in 1-2 years. what would your advice be? either pay off in full or a partial settlement? will the P/S effect my chances of getting a mortgage before 2018?
Thanks
Sara (Debt Camel) says
That’s a difficult one.After the debts drop off your file it obviously won’t make a difference at all. Before then, well some mortgage lenders will rule you out because they don’t like defaults at all, some may not case whether it’s partial or full providing the default is more than 3 years old and was settled more than a year ago, some may reject you if it was a partial settlement but not if it’s a full settlement…
You may decide to settle it in full if you have a large deposit but risk the partial if saving that extra £1000 will improve your deposit?
Sorry, not a clear cut answer.
Sully says
I have received an offer in a letter
Either set up a direct debit to pay off £1500 of debt OR to pay a reduced settled amount for £750 within the next seven days.
I was informed when I called them that if I agree to Settle it will show up as Settled on my credit report for a further 6 years.
What do you suggest I pick, I’d rather pay the lower amount but I don’t want the settlement status on my account till 2022 as I want a mortgage soon.
I understand that if I pay by installment then up until 12/12/2016 the DAY will show. After that I continue paying it but the debt will be removed from my report.
The date of default is 12/12/2010
Sara (Debt Camel) says
If this debt has a default date of 12/12/10, is it going to disappear from your credit record in December 2016 whether you settle it in full or partially.
sully says
Thank you Sara. I did clarify with the debt collector, another one advised that it is 6 years from the default date, I guess the firts one I had was a bit blonde. I managed to negotiate paying over 6 months. Hopefully from Jan 2017-2018, I will work very hard to boost my credit score!
Nicole says
Hi debt camel,
I would really like some advice regarding an old ccj.
Back in August 2011 a ccj was registered against me by Lowell p1 ( total nightmare) for the sum of £211. I paid off the balance but not within the month. On my credit report it shows the status as “active”. Even though the debt has been paid. i have bank statements to prove its been paid.
I’ve contacted them multiple times but they say as it’s an old case. It’s no longer on the system. They can’t help me.
I don’t know what to do,
Do I just wait it out until Aug next year (2017) and hope it drops off my otherwise clean credit report or do I chase it further?
I assumed once I paid it off it would stay on my file till Aug 2017 but be marked satisfied, which would help my credit rating a little.
If I chase it further and get it marked satisfied will it stay on my report for another 6 years?
Sorry, I’m so confused.
Sara (Debt Camel) says
It will drop off in Aug 2017.
You can either wait for that or get in touch with the County Court that issued the CCJ and show them the evidence that it was satisfied, see http://www.trustonline.org.uk/understand-judgments-fines/ccjs-and-county-courts/certificate-of-satisfaction-satisfied-vs-unsatisfied-ccjs .
If you get this corrected, it will still drop off next year.
If you have an important credit application coming up, I suggest it is worth doing this.
Nicole says
Thank you Sara,
Your advice is very helpful.
Kind regards
Nicole.
laura says
This is of great help but I have a question to clear up. I have 2 debts ive been paying off over nearly 6 years already, i defaulted when i had my son as i wasnt earning enough. Since then I have been paying both monthly and contacting them every 6 months for a review. What I need to know is, IF i do a settlement of a lower amount than owed and they accept. Does this Partially Satisfied stay on my Credit File for now another 6 years or as its the same creditors i faulted on and they accept my settlement offer then when my 6 years is up both debt and partially satisfied will NOT be seen on my record??
Sara (Debt Camel) says
The partially satisfied marker will be part of the debt record. The debt record will be deleted 6 years after the default date and the partially satisfied marker will therefore disappear at the same time.
Jim says
I would love some advice about dealing with settling some old credit card/phone/overdraft debt that I stupidly accrued when I was younger.
I have £577 and £369 with Lowell that both defaulted in 2012. £1600 with Hoist from a default in 2011 and £1600 with PR from a default in 2012. I haven’t made any payments against these accounts since their default dates.
Lowell recently wrote to me offering a settlement figure of £90 against the £369 balance which I am going to accept though haven’t got in touch with them to confirm as yet.
My financial situation has (marginally) improved over the years and I would like to offer full and finals on all 4 balances. I don’t dispute any of the amounts or my liability. I am going to try and get each creditor to accept 25% of the balance on each due to their age but am concerned about how to approach them.
Do I need to write to each creditor to ask them to prove they own the debt? As I say, I don’t dispute any of the balances and each creditor is shown on my credit file. Or should I write/call each one with my settlement offer? I would like to get each account settled as quickly as possible but I don’t want to trip up along the way.
Am I right in saying that once the account has had a full and final accepted the debt can no longer be sold on?
Any advice would be much appreciated :)
Sara (Debt Camel) says
You don’t have to ask the creditor to prove they own the debt. It may be worth asking for a CCA agreement for the credit card debts, see https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx. Or you could just make your F&F offer and if it’s refused, then ask to see the CCA agreement?
It can help to get your F&F offer accepted if you give more details e.g supply an income & expenditure sheet showing that you can’t afford to make more than a token payment to the debt and/or explain that the money is being offered by a relative or whoever if it can settle the debts.
Can a debt can be sold on after a F&F – see https://debtcamel.co.uk/problems-after-full-final-settlement/ for details.
Daniel says
Hi Sara. I have been offered full and final settlements on about 6 debts, none of these are in default and they all have arrangements to pay. If I accept the reduced full and final I will be able to afford to clear all of them. If I pay the full balance I will only be able to clear 3. I’m just wondering how bad an impact having reduced full and final payments would have on my credit file and will it be looked very poorly on when applying for a mortgage next year? If it would have that bad affect I was thinking pay off 3 depts in full and clear the others in full asap.
Niknak says
This is exactly my situation and would also love to know the answer! Thanks!
Sara (Debt Camel) says
this article looks at this sort of situation: https://debtcamel.co.uk/dmp-partial-settlement/
Nik says
Hi Sara, Thank you for your reply. I’ve just checked my report and the two lenders do not actually show on my report at all so I’m wondering if this actually affects me or not, if they’re not showing. Both debts are older than 6 years and one was previously a default but I have been paying it off consistently throughout (and since) it has disappeared.
Both debts together are £400 so am wondering whether to make an offer to settle or just keep paying them off slowly as they are interest free.
Would it matter if I partially settled if they are not even on my report?
Thanks!
Sara (Debt Camel) says
If you want a mortgage you need to get the debts settled asap. If they are already off your credit record then a full and final settlement is perfect – they will not reappear.
Rav says
Hi
I have a default on my credit file from an old capital one credit card. The default date is 04/03/11. I have a debt with them of £3000 and have been paying this off at £1/month. After speaking to them on the phone recently they offered a F&F settlement figure of £2060 saying this will show on my credit file as a partial settlement. My question to you is: the default will drop off my credit file on 04/03/17 so is there any point in me paying this? I’m thinking of applying for a mortgage in the next 12-18 months and want to get this cleared up. If I continue paying them £1 per month and the default drops off my credit file in 6 months will this have any effect on me obtaining a mortgage? Or am I better off paying the partial settlement figure?
Sara (Debt Camel) says
Hi Rav, even when the debt drops off your credit file it will still be a legal, enforceable debt that will make it difficult to get a mortgage, so settling the debt before a mortgage application is a good idea. See https://debtcamel.co.uk/dmp-mortgage/ for more details about getting a mortgage when you have been in debt management.
Rav says
Thanks for the advice. Much appreciated.
Donny says
Hi Rav,
Sara is obviously the expert here so take her advice over anybody elses in the comments. What she says about the debt still being enforceable is so true and they will clearly ask you if you have any outstanding debts and if it will be paid off before the mortgage. If I was in your situation I would see paying this F&F (If you can without hardship) as by far the best option to you! Here’s why I think this….
The default is going to drop off the credit file fairly soon anyway, so you’ll only have that partial settlement on the credit file until early 2017 – It may/may not have a negative impact on your score but the default is going to be there anyway and is a bigger problem than the “partial settlement” as far as I am aware.
I would save yourself the £1,000, get it cleared off now and off your mind. For the sake of having a slightly more negative impact for a short amount of time I’d say that’s a fairly small price to pay. I think if this is the ONLY default on your credit file and it’s otherwise clean then you need to think about it more.
My opinion above is not professional, and is just that, an opinion. I am basing it off the fact that a lot of people who are paying as little as £1 back on a £3k debt also have numerous other defaults and are having financial troubles, in which case you’re still going to have other things on there impacting it more than that “partial” flag.
Rav says
Thanks for the advice. Much appreciated.
Suri says
Hi,
I am in DMP since 08/2010 and by 04/2011 my default will not shown up in my credit file. However I will be still paying my debts.
my question is can I make a offer to my creditors for full and final offer after the default doesn’t shows in my credit file.
Whether this full and final payment will affect my credit file.
Sara (Debt Camel) says
I am guessing that “by 04/2011” should really have read “by 04/2017”.
You can offer your creditors a F&F now or after the debts have dropped off. After a F&F the debts will still drop off / will not reappear on your credit record.
Mac says
Can someone offer me some advise?
My debt to 3 accounts totalled more than £30,000 starting in October 2009 – I have been paying £300 each month without fail. The defaults have now fallen off my credit file. It will take years for me to clear the balance.
What I’m concerned aBout is if I make full and final settlement how will it affect my credit file. As it stands my credit file reads very good. I would not want them to mark it with anything.
Would appreciate any comments.
With regards
Mac
Sara (Debt Camel) says
As this article explains, a F&F on a debt that is no longer showing on your credit record will not cause it to reappear – it is gone for good.
Mac says
Dear Sarah
Thank you for your response – may I clarify that the f&f settlement will only be a partial settlement – not the full amount – the credit company have said if they accept they will mark my credit file as partially satisfied.
Can they do this?
With regards
Mac
Sara (Debt Camel) says
yes they can, but they can’t change the default date to a more recent one, so it still isn’t going to show on your credit record :)
Richard says
Hi, I have recently been contacted by one of my 3 credit card companies to say they have assigned my account to a company called Asset Link Capital. I have read some bad stories about this company online, with people saying not to phone them and only correspond by post. do I use their automated service to carry on paying the debt in the meantime or stop paying until an agreement is made? I have been offered by family to help me offer a partial settlement for this debt. Is this advisable with this company? I also have 2 other credit card debts which are smaller. I am hoping to offer partial settlements on them all but the bigger debt has become a worry as I am no longer going to be dealing with the credit card company directly.
Many Thanks
Richard
Sara (Debt Camel) says
It is usually easier to get a F&F agreed with a debt collector rather than the original creditor! See https://debtcamel.co.uk/debt-options/less-common/full-final/ which has a link to a template letter that you can use.
Marc says
Hi I have 3 defaults one I have paid in full one I’m paying back monthly but have option of settling the 6k debt for 3k one that is £700 pounds which is due to fall off my file early next year I haven’t paid anything to this debt should I partial settle on these debts ? Or try pay in full as I would like to get a mortgage and build my credit back up now would the mortgage be possible to get if I partial settle and the defaults fall off my file and my credit improves would I then be accepted for a mortgage or would the partial settlement go against me ?
Thanks
Sara (Debt Camel) says
This article https://debtcamel.co.uk/dmp-partial-settlement/ looks at this sort of problem. When a default has disappeared after 6 years a partial settlement will no longer be visible to lenders – except of course for the original lender you settled with!
Jemiah says
Hi
I am about to come out of a debt management plan by part settling with 3 creditors. Would this have a direct effect on my ability to gain a mortgage in the next 3 – 5 years? All debtors apart from 2 will be off my credit report within the next 6 months, will these 2 stop me from getting a mortgage?
Thanks
Sara (Debt Camel) says
hi Jemiah, I think this article https://debtcamel.co.uk/dmp-partial-settlement/ looks at exactly your situation.
LEON FERRY says
Hi,
I had an old defaulted account on my file while I agreed and paid a settlement offer.
Now over a month since and the credit is not showing Partially settled but as if I just paid the agreed settlement figure (50%) off the debt.
Do you have any suggestions as to my rights following this agreement and how best I should deal with the Debt Company?
I am very keen to improve my credit rating as fast as possible.
Thanks
Sara (Debt Camel) says
Your credit record should reflect what was agreed. Email the creditor and ask them to correct it, attaching a copy of the letter / email where they agreed it. If they don’t, complain to the ICO, see https://ico.org.uk/media/report-a-concern/forms/1523/information-handling-form.pdf
Leon says
Thanks for the reply.
I have spoken to the debt company and they have said the information has been submitted to the credit reference agencies. I know the payment has been submitted but I don’t think the zero partially settled balance has. They have suggested that I speak to the credit reference agencies as the information has been submitted. Would you suggest I raise a case with equifax sending them the settlement letter or push on with the the ICO complaint as I am concerned I will have to rectify with all credit reference agencies.
Thanks.
Ps keep up the good work, site is so useful.
Sara (Debt Camel) says
Why don’t you check the other CRAs? See https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to do this. If the others are right, then Equifax may have made an error. If all three are wrong, then it sounds like the debt collector messed up and you should go to the ICO.
Dave says
Hi, I am in the process of hopefully getting some payday loan refunds (thanks to you and the guys on here), I was wondering; I have 2 defaults on my credit file – one for a credit card of around £600 applied in the last few months and another for a bank overdraft about 3 years ago. The bank overdraft was paid shortly after in full and was marked as ‘satisfied’, however I am considering offering a partial settlement for the defaulted credit card. I know it will then be marked as ‘partially satisfied’, how bad can this be for the credit record? I am thinking about offering 50% as this will be a big saving. Does anyone have any thoughts here?
Also one further quick question, my credit record is currently at rock bottom. I am expecting many payday loan references to be removed (some payment plans) and one payday default. Also I am expecting to pay off around 6 payment plans in full to receive the ‘settled status’. Also I will reduce my debt on payday loans and outstanding credit cards etc by around 4k. Is this likely to drastically improve my credit record?
Thanks
Dave
Sara (Debt Camel) says
My first thought is that you will be lucky to be able get a 50% F&F offer accepted if the default is so recent…
My next thought is that as this isn’t the only default on your credit record, repaying it in full won’t make a huge difference so repaying it partially may not matter that much. This article looks partial settlements and credit records more generally: https://debtcamel.co.uk/dmp-partial-settlement/.
Getting rid of a payday loan default will help. As will getting your balances down. Getting rid of payday loans that were repaid on time won’t.
With a rock bottom credit record, nothing is going to drastically improve it unless you can get all the defaults deleted, which you can’t. By settling all the defaulted debts and starting to repay all the other balances things will slowly get better. But don’t take out any more credit!
Rob says
Hi there.
I had a credit card and a loan that both defaulted over 6 years ago, so they no longer appear on my credit report. I’m still paying both the accounts off by monthly payments. However I’ve recently received an inheritance so I’m looking to make a partial settlement. If so will this make the accounts both re appear on my credit report as partially settled, even though the default was over 6 years ago?
Many thanks
Sara (Debt Camel) says
Hi Rob, once a debt has disappeared it will never come back. So this is a great time to offer a partial settlement.
Rob says
Hi again Sara
Thanks for the swift reply, so how come I’ve read on other peoples similar questions that there full/partial settlements have appeared on their credit reports?
Thanks again
Rob
Sara (Debt Camel) says
I guess because the default was less than 6 years old so it is still showing?
Rob says
Yes your right their default date was 4 years ago. Makes sense
Thanks again for your help
Kind regards
Rob
Kevin Irvine says
Hi,
My 1st time on the site and have seen some great advice so thanks.
1 thing I would like to ask, once a default hits the 6 year mark and drops off you’re credit report, does the score improve immediately?
Also, I’m based in Scotland, am I right in saying it is still 6 years for a default to drop off, not 5, as is the situation with debts that are Statute barred.
Thanks in advance, Kevin
Sara (Debt Camel) says
Its always hard answering questions about when your credit score will improve and by how much, as it depends on everything else that is going on on your credit record. If there are other defaults or CCJs or recent missed payments, one default disappearing may not make much of a difference.
You are right that the 6 years until a defaulted debt disappears from your credit record has nothing to do with the statute barring. Even after the debt is long gone from your credit record it may not be statute barred if you are making payments to it.
Scott says
This is a great thread to read. Encouraging. I just want to check something please.
I have a credit card debt of £2.530.26. 1st credit have offered to ‘wite off’ £1,644.66 of the debt if I pay £885.60 this month. They will mark any default registered in relation to this account as ‘partially satisfied’.
I no longer own a home and so I rent. When trying to rent in future (as credit checks are required) will it benefit me or hinder me to have a ‘partially satisfied’ debt on my credit file? I can’t possibly pay the full amount and it would be very difficult, but possible to make the partial payment. I don’t want to do it if I won’t benefit much from it. The original debt was to Halifax for a credit card which they offered to me when I was financially much better off and very naive.
I would be so grateful for any advice.
Sara (Debt Camel) says
Landlords and letting agents can only see CCJs and insolvency markers – they can’t see the details of your individual debts. So a partial settlement would not be worse than a full settlement.
However, if you can only make this settlement with great difficulty, I think you should think twice about it. Can i suggest you talk to national Debtline 0808 808 4000 about your full situation?
George Hampton says
A very good and useful article and thread. I want to know when does the six years start? Is from the time it’s shows on your report or from when the borrowing happened. I had a an overdraft and at some point run into difficulty. I have settled a fair few of these. And had an offer from Orange to pay a tenth of my outstanding balance and it will be marked partially settled. The problem is previous debts have ruined my score and report but orange debt doesn’t show on my report currently. It was acquired in 2012 and they made this offer before Christmas 2016. What can I do and what do you advise? Thanks
Sara (Debt Camel) says
The six years starts from the date the debt defaulted. Have you checked all three credit reference agencies to see if it is showing on any of them? See https://debtcamel.co.uk/best-way-to-check-credit-score/.
If it isn’t and they add the debt with a recent default date, you can complain that it should be 3-6 months after you first missed payments to it, see https://debtcamel.co.uk/debt-default-date/.
Jo says
Hi
Please could you advise on the following. I paid a partial settlement on my credit card in Aug 2015, the default date was Dec 2014.. The account is closed, and is showing on my experian credit report as defaulted. I have called the credit card today and amount to pay to fully settle is £366.50 . I am wishing to apply for a mortgage and give my self best opportunity of getting one. Should I pay the remaining amount to fully settle or not ? Will it make any difference when applying for a mortgage? Am I right in thinking that even if I pay it off in full the default still shows for 6 years on credit file? Thank you
Sara (Debt Camel) says
The default will remain even if you pay it off in full.
From the point of view of getting a mortgage, there are three different cases:
1) some lender won’t lend to you becasue of the default, even if it is paid in full. At the moment it is only 2 years old. This may be a lot of lenders. more won’t mind once it is over 3 years old.
2) some lenders will lend if the default is paid in full but not partially
3) some lenders will lend even though it has only been settled partially.
Jo says
Sara
Thank you for your time in answering my question, it’s really useful to know what the different scenarios may be so that I can make decision on next step. Thank you for all the clear, factual, jargon free info on your website, its enabling me to improve my finances greatly.
Alistair says
HI,
i am currently in a DMP which is going to last for another 10yrs at current amount i pay which is £256 pmi tried to get a F&F from the lowest creditor which is £1089 i offered £350 and they refused and said i would need to pay £840 does this sound normal i thought they would bite my hand off lol
Sara (Debt Camel) says
Have you read https://debtcamel.co.uk/full-final-settlement-rejected/ ? That looks at why offers are rejected.
Albert says
I have a mark on my credit file from MYJAR. It shows as an open loan of £250 pounds with a zero balance. I have asked them to remove it but has anyone had any success getting rid of this kind of information?
Sara (Debt Camel) says
What happened to this loan – did you repay it in full? Partially? Was it sold to a debt collector?
On a separate matter, if you used payday lenders a lot, you should read https://debtcamel.co.uk/payday-loan-refunds/ and see if you may be able to get a refund.
Tom says
I recently (about 3 weeks ago) made a partial settlement with a DCA on behalf of Vodafone. I received a 20% discount on the balance and was told my default would be marked as partially satisfied. I’ve since realised I can afford to make the difference, is it now too late to pay the remaining balance and have my default marked as satisfied?
Sara (Debt Camel) says
is your credit record very good? if it isn’t, then I doubt you will see any diifference between a full and a partial settlement.
Tom says
I have 1 other default that drops off in April, all my other bad debts have dropped off recently as 6 years has gone past. The vodafone default has 3 years left to run. When the other default I have drops off in April the only negative information will be this Vodafone.