“This default is destroying my credit score – how do I get rid of it?”
This is a very common question!
It’s sometimes asked when people’s finances have improved and they are trying to clean up old problems on their credit history as fast as possible. Or sometimes the default feels unfair for some reason.
I will look at various cases to see what – if anything – can be done for each of them.
But first, there is no magic trick that an “expert” can use to do this:
- don’t ever pay a firm that says they can sort this for you;
- their claims are often exaggerated, they can’t do anything that you couldn’t do yourself.
Contents
When debts drop off your credit record
How long a debt stays on your record depends on whether the record shows a default date or not.
The two rules are:
- a debt without a default date stays on your record for six years from the date when it is settled. This applies whether it was settled in full or partially;
- a debt with a default date stays for six years from that date. You may have paid it in full, made a full and final settlement, not paid anything to it, or still be making payments… none of these matter, the debt is still going to drop off after six years.
So the default date is an important piece of information for you to know.
Don’t guess! Check your records with all three CRAs so you know exactly what they say.
Having a debt drop off your record because the default was over 6 years ago is the same in practice as having the default deleted.
Situations where the default should be removed
I am not saying these will be easy, but these are the most likely cases to succeed.
“I never owed this money”
If the debt isn’t yours, you should tell the lender and ask them to remove it from your credit record. It’s not just your credit record that matters here, you don’t want to be chased for money by the creditor or be taken to court for a CCJ.
“I was never in arrears”
If you recognise the debt but you don’t think you were ever in arrears, ask the lender for a statement of account. That may show where the problem is. You can then check against your bank statements to see if you made other payments that weren’t recorded.
“The lender stopped taking the money”
Sometimes the lender stopped taking the monthly payment by direct debit or by continuous payment authority. You may have assumed the debt was repaid and only found out later a default had been added to your credit record.
Here it is the fact that the lender stopped taking the payments that matters. You may be able to get evidence from your bank that you did not cancel the DD or CPA until months later. If it was the lender’s error, you should not have a default and you can ask for this to be removed.
“It’s not fair – I only missed one payment”
In this case, no default should have been added as you were never three months in arrears!
Write to the lender, then appeal to the Financial Ombudsman if the lender refuses to correct it, see the above article about what the default date should be for details.
“A debt collector has added a later default”
They shouldn’t have done this. A debt collector can add a new record, but it should have the same default date as the original lender.
Write to the debt collector and ask them to correct it, and then appeal to the Financial Ombudsman if necessary.
“The default was added very late”
The rules say that a default should normally be when you are 3-6 months in arrears compared to what your normal payments would have been.
If a creditor has added a default later than this, it should be changed to be earlier. That means it will drop off sooner, and your credit record will be clean sooner.
See “What should the default date for a debt be?” which describes how to get your record corrected. For many people this is just as good as getting the default deleted and it can be a lot easier.
Cases where you have to win the argument to have it removed
“The loan was unaffordable”
Lenders should have checked you could afford to repay a loan before they gave you the loan. A loan is only “affordable” if you can repay it without hardship and without having to borrow more money.
If a proper check would have shown that the credit wasn’t affordable for you at the time you applied, ask for a refund of the interest you paid and for any defaults or late payment markers to be deleted from your credit file.
You can also win complaints against credit cards and catalogues if your credit limit was increased stupidly high when you were only making minimum payments. And against overdrafts when you are in the overdraft for all or almost all of the month and this has been going on for more than a year.
See Affordability refunds for how to make these complaints. There are different articles for car finance, large loans, credit cards (including catalogues and store cards) and overdrafts. There is a free template in each article that you can use.
Hundreds of thousands of these complaints have worked.
Sometimes the lender will only remove “negative information” such as defaults and missed payments. Sometimes the whole credit record will be deleted.
Here is a comment from a reader who made a successful complaint against a payday lender:
I accepted Satsuma’s offer on 2nd January and received the refund on 17th January. The negative information was removed from my credit file as well which made my credit score jump by 100 points :)
“I was never properly informed about the debt or the arrears”
You may feel the creditor didn’t explain what the debt was or how much interest would be added.
Perhaps you moved house and the creditor carried on writing to your old address even though you notified them you had moved. That is an error by the creditor.
If you paid the debt promptly as soon as you know about it, you could ask the lender to remove the default. Point out that you previously had a good history of paying their bills on time and that you don’t have other credit record problems. This can support your argument. You may have more luck going to the relevant Ombudsman if the creditor refuses.
“The debt isn’t enforceable”
This may not be easy.
Sometimes a lender will agree a debt isn’t enforceable because it is statute-barred. In this case a default should probably have been added to the debt more than 6 years ago. So you can ask for the default date to be changed so that it is earlier and then the debt will drop off your record.
When a creditor cannot produce the CCA agreement for a consumer credit debt it isn’t unenforceable in court. See Debts – why, how & when to ask for the CCA agreement for details – this does not apply to all types of debt. But here the debt still legally exists and you owe it even though you do not have to pay it. As a result, the default will not normally be deleted.
“I was in an abusive relationship”
Many women have been pressured to take out credit for a partner or had a joint account with an abusive partner. Financial abuse is now recognised as a serious problem and most banks now subscribe to the 2018 Financial Abuse Code of Practice.
If you feel the debt and the default resulted from an abusive relationship, I suggest going to your local Citizens Advice and asking for their help to see if the debt could be written off and the default removed.
When it is very unlikely a default will be removed
“The lender is adding a new default every month!”
This may make your credit report look dreadful but it is normal and it doesn’t matter:
- the later defaults don’t make your credit rating worse because lenders’ scoring systems only look at the first one;
- the debt will drop off 6 years after the first default, the later ones don’t affect this.
“The lender agreed to reduced payments but still added a default”
This can feel very unfair, but legally they can do this when the arrears reach 3-6 months.
This applies if you have payment arrangements with one or two lenders or a debt management plan through a DMP firm.
And although you may hate that default, it may be better for you than an Arrangement To Pay (AP) marker on your file! A defaulted record disappears after 6 years, an AP marker stays for 6 years after the debt is settled.
“Six years is too long!”
If you just had a temporary problem it can seem very hard for this black mark to stay on your credit file for so long.
But there is legally nothing you can do to make the default go away sooner.
You can add a Notice of Correction to your credit file to say why the problem happened.
As the default gets older, some lenders will be less worried about it. But for some creditors, eg many high street mortgage lenders, any default, even five years ago, may result in a rejection unless it has been settled for several years.
Usually the best you can do is settle the debt as soon as possible. This doesn’t improve your credit score, but more lenders may be willing to give you credit.
When the lender has gone bust and can’t be contacted
This is a special case.
If the lender will not respond to the Credit Reference Agencies, then you can ask the CRAs to “suppress” the credit records. If this happens, although the records are still there, they will not be shown to any other lenders making a credit check on you.
Read How to correct credit records if the lender has gone under in detail and see if you think it can help you.
Do NOT try to do this if the lender is still going. Or if it is the early stages of an administration – then it is better to put in a claim for unaffordable lending. If your claim is upheld, the default will be deleted, and often the administrators just delete the credit record as it is simpler.
Options when cards are maxed out
Is an unknown debt on your credit file?
Improve your credit score for a mortgage
Habib says
Thanks for the reply Sara,
I have a ccj ,as I couldn’t pay the whole amount in one go so they took this further to court and we agreed to pay monthly with court £50 every month since the ccj date which is 17/03/2020, and I have been paying since ,however I found an opportunity for work and that’s owner driver franchise (self employed) it will including them giving me a van and and they just require a deposit as low as £1400 to £2400 +£400 franchise fee . So I don’t get why they need my score as I gotta pay all of that my self or maybe I just don’t know a lot of info regarding this , but anyway if I pay the whole amount which is £11,000 in one go and clear the ccj and probably build my score for a month or 2 then try re apply would my credit improve since I pay it and satisfied? Will I be accepted for car finance , loans, business etc?
Sara (Debt Camel) says
CCJs only disappear if you pay them in full within a month. If you pay this in full now, your credit score will not improve although some lenders may be more prepared to lend to you. I can’t guess whether satisfying the CCJ would help you here. Do you have any other problems on your credit record? Do you have 11k in savings?
habib says
So I just have give it a shot and hope it improves after paying? I managed to sell my car back home and few money from saving , I don’t have any other issues on my credit other than this ccj that I’m sure it’s affecting it. But I’m just worried that I pay it off £11,000 and will still have bad credit or it won’t improve . I pay everything on time , credit card , bills , direct debits . Which way can I go with this Sara? As my future is on the line right now and I have to open this business by end of this year otherwise the opportunity will go for work .
Many Thanks
Sara (Debt Camel) says
I’m sorry but the only way to know is to ask the franchise firm. Many lenders won’t touch you with a CCJ on your credit record, satisfied or not.
I think it would be better to look for some other work.
Leanne says
Hi Sara,
I had an old Credit card with Vanquis that they sold to Lowell about 4 years ago, in the last few months lowell have decided that they were no longer going to seek payment for the debt because i had informed them that I was recently made redundant and that they would be removing the default. Which I was pleased about. however my credit report always had both lowell and vanquis registered for the same default, and when i asked the CRA to amend it so it was just the one, they basically said lenders would be able to tell that it was a sold debt so not to worry. My question is as the debt was sold to lowell and then they decided to now remove the default, would i be able to get vanquis to remove it. For reference it states on the default the balance is zero and that it was sold.
Sara (Debt Camel) says
There is no reason why Vanquis should remove this default…
How large was the balance Lowell have stopped trying to collect?
Leanne says
It was about £2800, they removed the account a couple months ago.
Sara (Debt Camel) says
So Lowell have removed the default because of your current situation – it is rather an odd decision, debt collectors when they decide not to pursue a debt usually leave the credit record alone.
Vanquis would only remove the default if they had made a mistake with the lending – by you winning an affordability complaint and ther debt then being cleared. That is possible… but with 2800 still owing, it isn’t likely to clear the debt (which still exists, Lowell have just said they won’t collect it). I doubt whether this is worth bothering with. The default drops off in a couple of years anyway
Do you have any other old problem debts?
Leanne says
No that’s the only one
Sara (Debt Camel) says
ok, well the default will drop off 6 years after the default date.
Sean says
Hello
I had a credit card that defaulted on a balance of £478, another form bought the debt and have added another account to the file and say it was an outstanding amount of £354 and are saying it is defaulting every month.
Please can you advise what to do to correct this.
Sara (Debt Camel) says
once a default has been added, it is normal for another default to be added everymonth. I know this looks dreadful, but only 1 is counted in the scoring and it will all drop off 6 years from the first default date.
It is also normal for another account to be added when a debt is sold, again only one is counted in the credit scoring.
What sort of debt was this? Who was the original creditor?
John says
Hi, I entered a payment plan to pay in full 7 years ago to clear my debt. 5 of the creditor’s defaulted me on day one of entering the agreement and have since dropped off my credit file, I might add that I had actually never missed payments before entering the agreement. However Barclaycard and Bank of Scotland didn’t default me instead Bank of Scotland marked my credit file in good standing every single month of the agreement until it ended and then shut the account and marked it as settled.
Barclaycard have marked it ‘Arrears 1’ every month of the whole agreement and have now shut the account and marked it as settled.
Are those accounts worth bothering about? Should they have defaulted me? Or is it something I should just ignore now that they have closed and and just build my credit? I’m just not sure of the impact or whats the right or wrong course of action.
Thanks John
Sara (Debt Camel) says
Well the lack of negative marks on the Bank of Scotland debt means there is no reason to dispute that.
Barclaycard – were you paying them more than the normal minimum payments? Did they freeze interest?
John says
Yes they froze the interest for the duration of the payment plan and also left it one month in arrears for the entire 7 year period even though the agreement was in place and balance paid in full upon completion. I’m honestly not sure now what the minimum would have been.
Sara (Debt Camel) says
how much were you paying them and what was the balance at the start?
John says
Once they stopped the interest the agreed balance was around £6500 and the payment they were getting in the payment plan was £70 a month.
What gets me is that if they say I was one month in arrears before the start of the plan then surely the longer I was on the plan paying £70 at some point I would have wiped out that arrears payment as my payments would have caught up with themselves.
Sara (Debt Camel) says
Exactly. Either the arrears were increasing, in which case there should have been a default added, or they would have been reducing. Staying 1 month in arrears is not right. I suggest you ask Barclaycard to add a default in the first year of your payment plan, the debt will then drop off your credit record.
James says
Hello!
If I had an account that I missed 3 payments on let’s say; Jan-Mar 2025, then went into default April 2025. Then if the default is paid off 5 years later (April 2030) and the account is closed the same time…
How long in theory does the default stay visible to potential creditors? If the account is closed, there’s only one year left from the date of first default. So I would like to think it would be no longer visible come April 2026. But I’ve heard conflicting reports the default remains visible 6 years from account closure. Is there any truth to this? Also, what about missed payments in the above scenario? Do they remain visible longer than 6 years if you pay off a debt and the account is closed?
Note: I simplified the dates but the scenario holds true.
Sara (Debt Camel) says
In theory (and also in practice!) if a default date of April 2025 is recorded on the credit record, the debt drops off in April 2031. Paid or not.
I don’t know why you think it shouldn’t be visible after April 2026. That makes no sense.
If there is no default date, just a payment arrangement recorded, than the debt will drop off 6 years after it is settled, so in April 2036 on your numbers.
Missed payments are irrelevant. Either there is a default date, then the debt goes 6 years after that, or there isnt, in which case it goes 6 years after the debt is settled.
Hannah says
Hi, I have a loan that I recently defaulted on, and other credit cards I defaulted on in the last year. Unfortunately I was in a bad marriage which I’ve got out of but due to my partner financially taking my money and restricting me, i could not pay my debts and started missing payments. I then had to move into renting and most of my money went towards just basic living costs. I’m back on my feet now and have managed to get a pay rise at work. Is there any chance I can get the defaults reversed and go back to paying the normal monthly amounts for my loan?
Sara (Debt Camel) says
how long ago were the defaults? have any of these been sold to a debt collector?
what are your total debts at the moment and do you know what the minimum amounts were before the defaults?
John says
Hi,
I was a victim of fraud in February 2019. 16k was taken out in total with HSBC bank, a loan of 14k and 2k overdraft. I was only a uni student at the time and was surprised it was approved. I visited the branch as I couldn’t get through security over the phone as my details were changed. HSBC was informed within 24 hours and said they will freeze the account and investigate it. I didn’t get a response from them, and I buried my head in the sand. I kept receiving letters from HSBC that I owed money, and I was in arrears. I believe they defaulted and shut my bank account instantly. My mum was dealing with the matter on my behalf and said it was sorted. It wasn’t sorted as I kept receiving letters.
Over a year ago I disputed the debt through TransUnion, HSBC then sold my debt on to Lowell, I have made a complaint to Lowell, but they have rejected it.
I’m sure my account with HSBC was defaulted in February 19 but Lowell have changed the date to August 19, seems like they have changed it to 6 months more. I’m 26 now and would like to buy my own house soon. Should I try change the default date with Lowell so it can be removed/ Statute barred or leave it until August?
Sara (Debt Camel) says
It’s hard to know where to start with this unless you know/can find out a lot more.
Do you have any idea how the fraud happened?
Was this reported to the police/action fraud?
Why did your mother think it was “sorted”, did HSBC say something and then change their minds?
What did the letters you carried on getting from HSBC say and why did you ignore them?
Was a formal complaint ever made to HSBC?
What debt do Lowells have – the loans, the overdraft or a combination?
Why do you think HSBC defaulted the debt(s) in February, that would have been very unusual as at that point you hadn’t actually missed any payment?
Why did you dispute the debt wit TransUnion?
What did your complaint to Lowell say?
John says
I’m not sure how the fraud happened, it was very strange. I did report it to the police and received a crime reference from them.
I raised a complaint at the branch, but they came back and said I was liable for the debt which was very unusual, and the banks weren’t helpful. My mum used to call HSBC on my behalf and I’m not sure what was said on the calls, but she did say it was sorted, the letters just mentioned what was owed and the account was in arrears. HSBC did say the letters would eventually stop but it didn’t. I left a complaint online but never heard back and or got an email confirmation, I just didn’t know how or what to do at the time.
There are 2 debts in total, Loan for 14k and overdraft 2k that Lowell now has.
I’m just assuming it was defaulted in Feb as they closed the account after I disputed it with HSBC and I’m sure it said it was defaulted.
I disputed the debt with TransUnion when it was with HSBC under fraud. I wanted it to be removed from my credit file but then they sold my debt to Lowell a month later.
I spoke to Lowell over the phone and explained the situation, 2 weeks later they sent a letter confirming the fraud team have investigated it but still said I was liable for the debt. Even though the information they had on me was incorrect, Email, address, contact number etc Even location was wrong.
I understand its a difficult and strange situation hence why ive just left hoping it will be statute barred
Sara (Debt Camel) says
Well it can’t be statute barred at the moment, it is less than 6 years since the loan started. Talk to National Debtline on 0808 808 4000 about when it may be statute barred.
What is the rest of your financial situation like at the moment? Do you have other debts? Do you have a deposit saved for a house?
You could send both HSBC and Lowell a Subject Access Request asking for details of all the personal information they have about you.
For HSBC write to:
Attention of Rights of Individuals Fulfilment (ROIF). Customer Service Centre, BX8 1HB
and give your full name, date of birth and any contract numbers or details of the alleged loan and overdrafts.
For Lowell email dpo@lowellgroup.co.uk and give any reference numbers in your recent communications.
I have no idea what these will turn up. You probably need a debt adviser to help you sort through them – that cannot be me. And I am afraid your mum has so far not been of much help (to put it politely). A local advice agency such as Citizens Advice may be your best hope.
Funmi Ayoola says
Hi Sara,
Thanks for this, I’ve just found out a default has been added to my credit file from Zempler Bank for a credit card, I missed some payments due to unemployment. I can see the default was added in October however I didn’t receive a notice of default or any notification that my account was close to defaulting and the last communication I had with them was in July 2024 when they were still operating as Cashplus Bank. I haven’t changed addresses and my phone number/email addresses are all the same, is it worth me seeing if the default can be removed on the grounds that no notice was given?
Sara (Debt Camel) says
which month did you miss payments? Have you now paid the arrears?
Funmi Ayoola says
Hi Sara,
I have a further update from Zempler Bank after an hour on the phone to them it turns out the default notice was apparently sent in October 2023 which I didn’t receive HOWEVER I made a payment on the 15th October 2023 to bring my account back up to date, I then continued to use the card as normal. The default date on my credit file is showing as the 31st October 2023 but I used the card well into November. I then continued making payments as normal and using the card until March 2024 when I lost my job. I am baffled as to how a default could be added to my file yet I was able to use the card and the account wasn’t closed? the adviser I spoke to today didn’t have a straightforward answer to give me. I’ve now lodged a complaint with proof where payments have been made and the default marker on my credit file.
Sara (Debt Camel) says
If you cleared the arrears in the time given in the default notice, this should not have been a default.
BUT how many payments have you missed since March? It is better to have an earlier default rather a later one as it will drop off your credit record sooner.