“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 in someway
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
The rules about when debts disappear from your credit record
There are three credit reference agencies (CRAs) in Britain – Experian, Equifax and TransUnion. They all apply the same rules about reporting defaults.
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 with no 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 r4ecord 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 with it, ask the lender for a statement of account to see 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 is important – you may be able to get evidence from your bank that you did not cancel the DD or CPS until months later,
“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 FCA /ICO 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 FCA/ICO 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
“I was never properly informed about the debt”
Arguments can occur between you and a creditor if you feel they didn’t properly write to you about the debt, explain what the debt was or the size of it. Perhaps you moved house and the creditor carried on writing to your old address even though you notified them you had moved – this sort of thing.
If you paid the debt promptly as soon as you know about it, you could ask the lender to remove the default. Pointing out that you previously had a good history of paying their bills on time and that you don’t have other credit record problems can support your argument. You may have more luck going to the relevant Ombudsman rather than the ICO if the creditor refuses.
“The debt isn’t enforceable”
Sometimes this will work, sometimes it won’t.
Sometimes a lender will admit – or a court may decide – that a debt isn’t enforceable because it is statute barred. In this case a default should have been added to the debt more than 6 years ago, so you should 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. 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 be deleted.
“I should never have been given the loan as it 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 again or get behind with bills.
If a proper check would have shown that the credit wasn’t affordable for you, ask for a refund of the interest you paid and for any defaults or late payments markers to be deleted from your credit file. See Affordability refunds for info on how to make these complaints for different sorts of credit including payday loans, Provident, guarantor loans, car finance, large bad credit loans and even catalogues.
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 Satsuma, a payday lender:
I accepted Satsuma’s offer on 2nd January and received the cheque 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 in an abusive relationship”
Many people, usually 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 Financial Abuse Code of Practice published in 2018.
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 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 payments arrangements with one or two lenders or a debt management plan through a DMP firm. See How does a DMP affect my credit rating for more details.
And although you may hate that default, it may actually 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.
“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.
“I agree with the default, but six years is too long!”
If you just had a temporary problem, perhaps you lost your job, or couldn’t work when you were unwell, but after a year you were sorted and back making payments it can seem very hard for this black mark to stay on your credit file for so long.
But there is 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.
Usually the best you can do is settle the debt as soon as possible. This doesn’t get rid of the default and doesn’t improve your credit score, but it will mean that more lenders are 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.
Don’t 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 in the administration to get a refund 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.
Equifax changes its credit scores!
Is an unknown debt on your credit file?
Improve your credit score for a mortgage
Rafi says
Hi,
I thought that I have a great credit score as paying all of my direct debits on time and paying the credit card in full balance each month.
I have just signed up with Experian to check my credit as never checked it in my life. When I saw my credit score, I was shocked as it is poor. I download the report that found out that when I was living in my previous address, the landlord got a tv and iPhone from shop direct on finance under my name and the landlady took took internet with talk talk under my name as well ( I found out this couple of days ago).
I didn’t know this until the landlady was leaving her house to Immigrated to Australia, I rang up shop direct and I have told them it was probably a mistake as I got my iPhone contracted with 3 network for almost 8 years. so when I was asking some more question and keep pushing the agent to provide me with some information, I found out that the finance was under my name, but the account number, sort code and email address was from landlady. .
When I checked my credit score, I found out about Talk Talk as well. so I don’t know how I can get rid of this default from my credit score as I`m about to apply for a mortgage in couple of months and Im sure no one will provide me a mortgage, if they are willing to offer me, the APR might be very high. I have read that after 6 years the default from your account will be deleted, for me 6 years is way to long.
Thanks
Sara (Debt Camel) says
From what you have said, this is identity theft and you know who did it.
Read https://debtcamel.co.uk/loans-using-your-name-stop-identity-theft/ which looks at what you can do. If you need help with this, talk to your local Citizens Advice,
These things can take time to resolve – I don’t think you should assume it will all be resolved in a couple of months :(
Aisling says
Hi
I had a credit card and despite notifying the bank of my new address they initially started and then stopped chasing me for payment after the bank account I had with them was closed. I just checked my credit file recently and since 2015 they have logged a default on my file every single month that I haven’t paid (despite not sending letters). The debt is very close to being statute barred in the next month or so, but I have 2 questions:
1. Should the default not just been logged for the first/earliest month missed or is it correct for them to have logged a default every month?
2. If logging a default every month is correct then do they all drop off at the statute barring date or is it on a rolling month by month basis over the next 6 years ie the earliest one drops off at the statute barring date, the next one the month after etc etc meaning that it’s another 6 years before the defaults are removed?
I ask as my current mortgage deal expires towards the end of this year and this could affect whether I get a decent deal or not.
Thanks
Sara (Debt Camel) says
The debt is very close to being statute barred in the next month or so,
read https://debtcamel.co.uk/statute-barred-debt/ – you can NOT assume it is statute barred 6 years after the first default on your credit record as that explains.
1. A default should only be added when account is 3-6 months in arrears
2. the debt drops off 6 years after the first default date,
Aisling says
Hi
Thanks for the info.
How would I know what the 6 year anniversary is then? If the answer is to contact the company then that would mean the 6 year timeline would start ticking again surely?
Thanks
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about whether the debt is as close to being statute barred as you hope. You certainly do NOT want to ask the creditor.
lynne Byrne says
Hi Sarah,
On the subject of no defaults ever being added to several JD Williams accounts on which I had to make reduced payments over six years ago.
These accounts were sold onwards to Intrum and two to Lowell and should by now have gone from my credit file, but have not because they were never defaulted. I contacted JD Williams and received the following response:
“We agreed reduced payments arrangements with you on your accounts due to financial difficulty. Your payment arrangements became interest free in December 2015 and I see you kept to the arrangements. We sold the accounts with no detriment in 2017 because they were on interest free payment arrangements and we are primarily a retailer rather than a debt collector.
Outcome of your complaint
As I’ve not identified any errors, I’m unable to uphold your complaint. I’m very sorry that you’ve had to bring this matter to the attention of the complaints team and I hope my letter has outlined how I’ve reached my decision.
This is our final response on the matter. If you are not satisfied with our response, you have the right to refer your complaint to The Financial Ombudsman Service, free of charge, but you must do so within 6 months of the date of this letter.”
I am not sure why they will not apply a default and so I presume that I now need to complain to the Ombudsman regarding this? If so,what are my chances of having a default backdated to the time I started reduced payments?
Sara (Debt Camel) says
I am not sure why they will not apply a default
I suspect they sell non defaulted accounts for more money…
I can’t guess what the chance is of you winning the case at the ombudsman, but if you don’t try you will lose it!
You should argue to the Ombudsman that you were making very low payments and JD Williams never explained to you that by not defaulting the account you would be worse off in a few years because your credit score would continue to be damaged.
lynne Byrne says
Thanks Sara,I will now contact the Ombudsman.
Mark Jones says
If I opened an account in 2017 sept when will it come off my credit file?
Sara (Debt Camel) says
Has the account been closed? or defaulted?
Mark Jones says
Not sure I’m stil
Paying it but on the credit report it says closes 6 years after account closes thought it was 6 years after I opened the account
Sara (Debt Camel) says
No, an account will drop off 6 years after a default date is recorded OR 6 years after the account is settled – which ever is the earlier.
If you are still paying it and it hasn’t defaulted it will never drop off. People have credit cards showing for decades…
jessica knight says
Hi
I contacted Marbles, my original credit card provider, as I believed the account should have defaulted back in 2014 when I entered into a DMP. They informed me it did default in Aug 2016 but the debt collector they have sold the debt to (Hoist in 2016) are refusing to add this saying they know nothing about this and it was only pre-default. Where do I stand with getting this corrected? Hoist did say they would look into it, by contacting the CFA, but could take 90 days, Marbles didn’t really know. Can I get this corrected myself by raising a dispute on my credit file, if so which credit file do I do this on please?
Sara (Debt Camel) says
Hoist did say they would look into it, by contacting the CFA, but could take 90 days
Do you mean contact the CRA?
Do you have something in writing from Marbles saying they defaulted the debt in August 2016?
jessica knight says
Sorry yes the CRA.
No, I haven’t anything in writing from Marbles, I only have many default notices, from the months before Aug 2016, which I believe are different?
Sara (Debt Camel) says
“I contacted Marbles, my original credit card provider, as I believed the account should have defaulted back in 2014 when I entered into a DMP. They informed me it did default in Aug 2016”
You want them to put this in writing.
Elizabeth Stewart says
Hello,
How likely is it that I will be accepted to take out a mortgage with my partner once default has dropped off my file? If I am right, the default should be removed August 2022 as it was applied in August 2016 and settled not long after.
The default was applied in August 2016 and I have no other debts. I should have challenged this at the time the default was applied as I was making payments to the company and then all of a sudden I received a letter to advise of default. I was young and stupid, living alone and paying high rent after just leaving home – ordering things from a catalogue and then not really being able to afford the high payments! Lesson well learned, just unfortunate that we couldn’t go for the house we really wanted 3 years ago because of this.
Sara (Debt Camel) says
It should be fine.
Ashley says
I have been on a debt management plan for nearly 5 years to clear my debt and get my life back.
I January I received some money for my birthday and I called one of the companies – Next – and advised I wanted to pay the outstanding balance, I was told it was £300, so in good faith I paid this and updated my debt management plan. Last week I received a letter to say I defaulted and owe £400. I have contacted them and received and email that doesn’t even make sense, and have been told someone will call me. I stil have not heard anything from them although I have paid the full outstanding balance(as I requested to back in January) and advised them it was an error and omission on their part and therefore asked them to ensure this default was not on my credit report., and advised them again this is a formal complaint. They have have replied and said the default will remain on my file for 6 years. How can I get them to remover it as this was not my fault. Their representative gave me wrong information, took a payment of a lower amount and then waited over 3 months to contact me. PLEASE CAN ANYONE HELP? Thanks in advance
Sara (Debt Camel) says
If they have rejected your complaint, send it to the Financial Ombudsman.
You can say to the Ombudsman that it is unfair to add a default now. If a default should have been added, it would have been nearly 5 years ago. Also you paid the amount you were told to pay so the debt should be marked as settled with nothing owing.
Also email dataprotection@next.co.uk and say you would like a copy of all your personal information for the last 6 years including recordings of the phone calls in the last year.
Jake says
Hello all, in Jan 2020 I stupidly fell into the trap of shop direct andspent £158.
Then I missed payment in Feb, By March we were put into lockdown and was told I couldn’t work anymore and being self employed, didn’t get help straight away.
I wasn’t back to work until end of June ,after my first week at work I rung very and made a payment 2cnd of July. I updated my address and It was on July’s statement .In August I lost my job of3 years due to covid.My father had a stroke early Sep so when I rung them in sep they told me they had sold my debt and I would get a letter in the post.so I check my credit report April 21and saw lowell has defaulted me in Sep and I had been sent a ccj letter combining 2 other accounts in March. Rung the solicitors and they have sent me the assignment notice to my old address . Very have sent me my default notice, and notice of assignment to lowell to my previous address. I’ve requested Sar and cca request to both parties but I’d like to know where I stand with having the default removed?
I’m so stressed and worried I’ll have to sell everything my dad has left me.
I’ll pay the debt as I did back in 2016 when I stupidly fell in, I ended up paying more than twice what I had in interest and fees until I paid in full in 2017. Over 6 months I missed payments but they didn’t default me then, but now in a pandemic they are allowed?
Also lowell has added a default every month since September when I never knew they had it.
Sara (Debt Camel) says
When did you tell Shop Direct you had lost income because of the pandemic and did you ask for a payment break?
I had been sent a ccj letter combining 2 other accounts in March.
Was this a letter threatening a CCJ? Or a letter saying they had obtained a CCJ?
Can I double check that you had told SD your new address, it was shown on your SD statement but Lowell sent letters to your old address?
Over 6 months I missed payments but they didn’t default me then
Are you saying there was a period of more than 6 months in a row when you didn’t make any payments in 2016?
Also lowell has added a default every month since September
This is what always happens. Only the first default matters for credit scoring. This isn’t a problem.
Matt says
Hi Sara
I have just won an appeal against quick quid for two default loans that are still showing on credit file . As said in an earlier post about getting a mortgage now I have won this case . Can I fast track the information to the credit reference agency and ask them to remove them as this was the last issue on my credit file.
Thanks
Sara (Debt Camel) says
There is no formal “fast track” route.
You can ask the credit reference agencies, supply the details from QQ and ask the CRAs to “supress” in information on your credit record pending confirmation from QQ. But I don’t know if this will work or how quickly.
Dominic says
Hi Sara,
I have contested a default on a Myjar loan (on grounds of unaffordability) and have had a response from ‘Harrisons Business Recovery and Insolvency Limited’ that states –
“Experian has confirmed that all My Jar loan will be removed from credit files.”
I’m glad to say this is indeed the case as per my MSE Credit Club report. It disappeared on my most recent update.
However the default still exists on my Equifax report. Can we assume Equifax will follow the same path in time or is there anything I can do to try and get this removed or suppressed from my profile with them too?
Regards
Dominic
Sara (Debt Camel) says
I suggest you ask Harrisons this.
Matt says
Hi Dominic
I spoke to Myjar last week and they told me that they had removed all of my accounts from there system and if there were any issues it was down to the credit reference agency. I am waiting to check my report in a couple of weeks and if they are still showing I will make a request to each of the credit reference agency. Hope that helps .
GB says
I was declared bankrupt March 2015. I’m looking to get my credit report cleaned up. 7 debts were included in the bankruptcy. In April 2021, I contacted all the creditors to remove the debts from my report. I had read that the date of default should be no later than date of bankruptcy and all debts will drop off 6 years from default. 6/7 creditors removed the debt from my file. One creditor is refusing and they are stating that the debt will drop off 6 years from the account closing. As I was discharged from bankruptcy in March 2016, this will be the date of account closure. Therefore the debt will drop off March 2022. I’ve looked for hours online what the ruling is but I can’t find an answer. I’d be inclined to agree with the creditor but the other 6 have removed the debt so I’m quite confused. Can some help or advise further please? Thanks
Sara (Debt Camel) says
See https://debtcamel.co.uk/credit-file-after-bankruptcy/. The creditor is wrong – a default should have been added no later than the date you went bankrupt – who is it?
GB says
Thanks for your reply. It’s poundstopocket who are now part of onstride financial. The default date on my report is correct March 2015 but it is still showing in my report. Their argument is that the debt will show until March 2022 as I wasn’t discharged until March 2016. Everything I’m reading is contrary to what this creditor is saying. – sorry I didn’t realise my name would show on the last comment would you change it to GB if possible? Thanks again for your help.
Sara (Debt Camel) says
“The default date on my report is correct March 2015 but it is still showing in my report. ”
what report are you looking at?
GB says
Hi Sara, this is on my Transunion report. It has been removed from my accounts section but is still showing on a section called “MODA”. I’ve spoken to 3 people at Transuion on the phone and they don’t really seem to understand what MODA is and can’t explain why it’s still showing on my report. I disputed the loan from my account section as the default date was incorrect. This was amended to show the correct default date and then removed as it was over 6 years. The next day I check my report and it had moved to a section called MODA. When I challenged Transunion on this they said the information they have is that your account closed in 2016 and 6 years have not passed. I’ve managed to find more information on the 6 year removal closed v default date. Both Transuion and Experian report a debt will be removed 6 years from default or 6 years from closure – whichever comes first. I again put this to Transunion but they won’t touch it and they have all told me MODA only shows for 50 days anyway so it’ll be gone soon. Doesn’t help my current situation as i’m trying to put an offer on a house tomorrow. Thanks for your input Sara, much appreciated.
Sara (Debt Camel) says
when is the 50 days up?
are you going to apply for a mortgage through a broker, if so what does the broker say?
Steve Dell says
Hi,
I entered in to a DMP in Jan of 2018. This was due to a gambling addiction, which I have now managed to control. My debts spiralled out of control. I was maxing out credit cards, overdrafts and using pay day loans to fund my addiction. My debts were at £25000 which I have now managed to get to under £14000. Some companies agreed the loans were unaffordable and were able to refund some money. Whereas others did not agree and I am still laying those off.
My question is: Do my defaults fall of my credit report 6 years after the date of the default even if I am still paying my DMP?
Sara (Debt Camel) says
Yes they do. But that doesn’t mean you can stop paying them.
How much are you paying off the DMP each month?
I hope you took the cases where the lenders rejected a refund to the Ombudsman?
Robert says
Hello Sara, question please! I have many closed credit card accounts on my file. Two of which are with Lowell and Link finance. I was in DMP, which included the 2 cards and 5 loans which I defaulted. The loans will come off my file within the next 3-5 months, 3 have recently come off. My 2 credit cards were paid off in July 2020. Will they remain on my file for 6 years from the date I paid them off? If so, will it harm my credit opportunities given the two companies are well known for buying debt. I was exited with the prospect of the defaults All going by September 2021 but now I’m worried about the impact of the two cards with Link and Lowell finance. Thanks Rob.
Sara (Debt Camel) says
Do these 2 credit cards each have a default date on the credit record?
GB says
The 50 days are up in 32 days. Yes my partner’s dad is a mortgage advisor. He said as you’ve had no credit history in past 6 years and the only credit showing on your report is a defaulted pay day loan, it’s unlikely I’ll be accepted for the mortgage we want. Coincidentally I’ve just had an email from them saying the dispute is successful and it’ll be removed in 48 hours! Hopefully this is all over now . Thanks for your help!
DannyD says
Hi I have recently started paying some old debts off through lantern and they have only just added the defaults on my Experian credit file. Will these drop off 6 years after default date or 6 years after they were added to Experian. ( Debts from 2016/7 but only added this year weirdly)
Sara (Debt Camel) says
They drop off 6 years from the default date on the credit record. So if you think that is too late, read https://debtcamel.co.uk/debt-default-date/ and ask the original creditor to add an earlier one.
Bev says
Hi. I’m just wondering when a debt will fall off. The default dates are March 2016 but the satisfied dates are aug 2018. Do they drop off 6 years from the default date or 6 years from satisfied date ? Thanks B
Sara (Debt Camel) says
6 years from the default date :)
Bev says
Thank you Sara, that’s brilliant, I won’t bother chasing them to change the dates then. Bev
Dee says
Hi, Provident is sending out letters to person’s asking them to vote for compensation, the thing is, if one should vote, to my understanding is that they may offer 4.24pence to possibly ever Pound that you borrowed from them. If this the case, i don’t think anyone should vote.
Q: My question is, what happens if no one voted?
Sara (Debt Camel) says
Provident say you may get 10p in the £
I think it could be less than 2p in the £, see https://debtcamel.co.uk/provident-scheme-tiny-refunds/
You can if you want choose to vote against the Scheme – Provident will still treat this as a “claim” to the Scheme if it goes ahead. See https://debtcamel.co.uk/provident-scheme-refunds-vote/ for how to vote.
Obviously some people will vote – there is no chance that no=one will vote. Your choice is whether to vote for or against or not vote. Schemes have been passed when only a very small number of people voted eg 4%
Daniel says
Hi, I had a credit card with Aqua and having got into some financial difficulties, I entered a debt management plan with StepChange debt charity. Aqua accepted the DMP and I was making payments to them for around a year. However they then sold the debt to Link Financial outsourcing in August 2017 who have continued to take the payments from StepChange but have applied a default on my credit file in April 2018. Are they able to do this when I have still been making the regular payments through my DMP?
Thank you in advance for any assistance or information you can provide?
Kind Regards
Daniel
Sara (Debt Camel) says
yes they can. But I suggest you go back to Aqua and ask them to add a default back at the start of your DMP or at the latest when they sold it to link in 2017. link then have to use that date.
See https://debtcamel.co.uk/debt-default-date/ for more about default dates.
When will your DMP be completed if you carry on paying it at the current rate?
Daniel says
Ok brilliant, thank you, I will try to get in touch with Aqua and make this request.
My DMP is scheduled to end in March 2023 with the current payment schedule.
Sara (Debt Camel) says
so the end isn’t that far off. If it was a long way I was going to suggest you think about this: https://debtcamel.co.uk/ask-cca-agreement-for-debt/
You still can, you just may not think it’s worth it – up to you.
Ally says
Sarah,
Firstly, this is my first time back on this site in a over and a year and a bit… that may sound bad but it’s a good thing, I got multiple refunds thanks to you and have been debt free for ages. I thank you for that.
But…
I have a credit card (limit £450) from RBS that I defaulted on a few times back just under 5years ago.. i assume it was sent to a collection agent because I had to arrange to pay this in full over 2 or 3months, it was that long ago I can’t remember.
My query is, firstly do you have a contact email address I can contact RBS to discuss this and the possibility of it being removed, I closed the account as soon as this happened so I don’t have any loving Info or even my account or card number (cut it up in a huff at what I had got myself into)
Secondly, because I was in the height of a payday loan cycle, with almost all of them being removed and refunded due to unaffordability what do you think my chances of asking RBS nicely if they could remove from my credit file , given length of time circa 4yrs 8months and the cycle of pay day loans I was involved in it was clear I was an idiot when I was younger.
Thanks,
A
Sara (Debt Camel) says
No I don’t.
I think your chances are about zero, sorry.
A says
Ok,
Will give it a try anyway. Thanks.
A says
Sarah,
Whilst I have got you here..
My Experian report, when I look at my settled accounts various pay day loans are in this section but show for example 9 values with a green tick saying in good standing but have one value saying not reported… bearing in mind these are in the settled accounts section should I still be worried about these?
Thanks
Sara (Debt Camel) says
It doesn’t sound worrying to me.
Martin w says
Hi, I had a default with aqua on my credit file, the last payment I made was February 2017. I then entered a DMP, the debt was taken over by Cabot and updated in 2019 and on my credit file it says no data of any payments since 2014 just wanting to know if it should drop off in the 6 years from 2017 or when it was updated in 2019 I have not heard anything off Cabot at all
Sara (Debt Camel) says
Is there a default date showing on the credit record? You may think a payment not being made is a default, but it isn’t in credit reporting terms.
Was there a period where you were not making any payments to Aqua at all before Feb 17?
Martin w says
No I was making payments up until 2017 and I can’t see a date on my file
Sara (Debt Camel) says
At the moment it will never drop off as there is no default date so it will drop off 6 years after it is settled but as they aren’t recording your DMP paymnts that will not happen…
You can ask Aqua to add a default when you stopped paying in Feb 2017. Cabot then have to use that date. It will then drop off in 2023.
When will your DMP complete?
Martin w says
It’s finished now, I was with immediate financial and I think they stopped trading so it was transferred to NextGen solicitors.
About half way through paying my DMP they said they were changing it to something where I paid for 2 years and that would be it.
My last payment to them was August 2020 but I still have an active debt on my file
Also I have spoken to NextGen a few months ago to try and clear things up and they just said Cabot are not responding to them
Sara (Debt Camel) says
How many debts are in your DMP? Are you paying NextGen for this? It will probably be much better to switch to a proper debt management company eg StepChange who don’t charge you… and Cabot will talk to them…
Martin w says
I’m not paying NextGen any more my final payment was August 2020. I was lead to believe everything would be sorted after the 2 year period ended but I still have an active debt on my credit file.
Dave says
Hi I entered a payment plan with several creditors in 2017. I decided to check my experian credit report today and noticed that all the creditors defaulted me in 2017 apart from one which has marked every month since 2017 as being in arrears with a number 1 next to it.
My concern is in 3 years time when all the defaults disappear that I will be left with this account affecting my credit for a further seven years? Will this account still show? Do accounts drop off 7 years from the first arrear or from the last? Bearing in mind these are consecutive and no months have been positive since 2017.
Thanks
Sara (Debt Camel) says
Accounts drop off 6 years from the default date. If there is no default date, they drop off 6 years from the settlement date.
If an account is showing as 1 then there is no default date… You need to contact the original creditor and ask them to add a default date – see https://debtcamel.co.uk/debt-default-date/
Dave says
Thanks for the reply, I will do just that.
I did however read that because they are consecutive arrears that they will all fall off after 7 years from the first one but if there were breaks in the arrears where the account was caught up in payments this wouldn’t happen?
Sara (Debt Camel) says
I did however read that because they are consecutive arrears that they will all fall off after 7 years from the first one
not sure where you read that but it is WRONG
Dave says
Thanks just one last thing, I’m guessing the fact the account has stayed at a 1 every month suggests they haven’t been updating it and there for the previous month status is just copied over each time otherwise it would change to a 2 and so on….
When’s the best time to contact them over it, at the end of my das payment plan or now?
Sara (Debt Camel) says
You are in a DAS? I suggest you ask in the comments on this page https://www.advicescotland.com/home/debt-arrangement-scheme/ from a Scottish debt advice website.
Lee says
Hi Sara
I am in a dispute with Scottish Power after they added a default to my credit file. In March 2019 I notified them of my intention to switch supplier due to house move. I got a final bill which was more than I expected so arranged to pay it monthly.
the first payment never came out so I contacted again between April – June 2019 I had multiple conversations about setting up plan and was told multiple times the plan was set up. It wasnt then until Sep 19 I seen a default on my credit report and no payments had been made.
I had moved house so received no correspondence. and presumed the debt had been paid. it is now settled in full but they wont remove the default. i even have correspondence from them telling me it will be removed if i pay it off. which i did, and no they wont remove it. I have asked them for a deadlock letter to take to ombudsman,
your thoughts?
Sara (Debt Camel) says
I suggest you submit a Subject Access Request to SP (see https://www.scottishpower.co.uk/legal/privacy-policy for how to do this) and ask them for recordings of the phone calls since February 2019. They should support your complaint.
Lee says
I have this already it was communication through Web chat and email so all the communication I have showing this already.
do you think if it goes to Ombudsman I have a good chance ?
Thanks :-)
Sara (Debt Camel) says
From what you are saying, yes I hope so.
Becca F says
Hi,
I’m so confused. I have a default from Barclaycard. 26th November 2015. It has £314 left to pay on it but I haven’t paid to it since having my two kids 3 years ago. Should I rush to pay this before it gets to six years this November or should I just leave it. Can it re-damage my credit file if I leave it? Because I’m 28 now I really don’t want anymore damage. Thank you xx
Sara (Debt Camel) says
Have you looked at your credit record receiontly? It would be normal for Barclaycard to have sold this debt to a debt collector before now.
Becca F says
Hi,
Yes I just looked it just says default date November 2015 – and they have all my updated details, I’m confused on what I should do. Or is there something else in particular I should be looking for?
I just really don’t want to end up with more damaged after my credit record is finally on the up and I want to buy my first house in the next two years.
E=MC2 says
Personally I wouldn’t pay Barclaycard a penny based on:
What they’ve done to others
They haven’t chased you
Statute bared in November and drops off your credit report
But that is just me, if you can afford it and really want to pay it, then do so.
Other than that spend it on the kids and get a Dominos & a bottle wine for yourself.
Sara (Debt Camel) says
This article looks at this general situation where you haven’t heard from a debt for years: https://debtcamel.co.uk/no-calls-or-letters-about-debt/
Have you moved in the last few years?
If Barclaycard have your current address then you have fewer problems, because if they or a debt purcahser want to get in touch, they will be able to. the problems come where the letters and possibly court papers might be going to an aold address and you won’t hear about them.
Becca F says
I don’t have the money to pay it, that’s my panic. But if worse came to worst I could watch my credit report like a hawk and pay a ccj through family if needs be to have it removed. or is that not really an ideal solution. They definitely have my address as I got a random letter from them just before Xmas saying they were paying just over £100 to the debt due to lack of support I had received during the hard time or something along those lines. So they 100% have the means to contact me. I’m moving house in a month but I have Royal Mail redirect for 6 months set up. So if I don’t hear between now and November would I be right to assume all would be well.
Sara (Debt Camel) says
ok so they do know where you live. That is good.
the problem is that the debt may not be definitely be statute barred at that point – see https://debtcamel.co.uk/statute-barred-debt/. Do you know if you ever received a Default Notice for it?
Becca F says
I’m actually wondering if it would be worth leaving it as there is only 5 months left incase they have maybe already started proceedings & if they CCJ me I can borrow the money from family pay it In full and pay the £15 court fee to have the ccj removed. Within a month. Or do I have that wrong also.? I’m so conflicted on my options.
Becca F says
I don’t have anything in terms of a default notice. I don’t even remember if I received one. So maybe I’m better off calling barclaycard and arranging a small monthly payments until it’s cleared, I really don’t want to end up worse off for 6 years because of £300 – would it matter if my monthly payments went over the 6 year date – as it restarts the 6 years? I’m guessing it would just keep running until I cleared it.
Sara (Debt Camel) says
the other thing you could do is offer a lower amount in full and final settlement if you can afford this.
Whether you settle it in full, settle it for a lower amount, start making monthly payments or ignore it, it will still drop off your credit record at the 6 years point. But if you ignore it you may get a CCJ.
Becca F says
Yes – maybe I could just offer full and final settlement. Can you recommend what a realistic figure for £314 would be?
Because dependant on that & there acceptance will depend on a full and final settlement or a £20 a month payment.
I just want to say……
I can’t thank you enough for the time you have given me. I’m really appreciative & would of been left with ten thousand questions still if it wasn’t for you so thank you.
BUT
I’ve just seen that settlement is damaging to your credit record & stays on there for 7 years. Is this the case if I just make monthly payments.
Sara (Debt Camel) says
it isn’t true! See https://debtcamel.co.uk/ff-credit-record/
WHATEVER you do, pay it in full, start paying it, pay it in part or ignore it, this debt will drop off your credit record. The reason not to ignore it is the worry that yoyu might get a CCJ added to your record which would be there for another 6 years.
It’s pretty hard to guess what they might accept as a settlement – this is a situation where it is actually easier if they have sold your debt to a debt collector.
Becca F says
Okay that link just shed a massive amount of light on my situation – so I think I’m understanding come November 2021 my default will drop as that’s the 6 year marker. And if I offer a full and final settlement say tomorrow that will only be a marker on my account until November because that marker will disappear with the drop of the default. I’m grasping it now.
Amrita says
Hello, I was wondering if you can help me please.
My sister took advantage of me when I was 18 as she wanted to get a contract phone under my name as she could not get one under hers and promised to transfer me the payments each month, but of course failed to do so. I am currently in over £800 debt because of this and I have set up a payment plan with Lowell to pay off a small fee each month to help settle this.
I wanted to get a credit card to improve my credit score as I may need to take out a loan in a few years time. However, I have just found out that this account was defaulted a year ago and I had no idea of what this meant until today.
My question is, if I pay off this debt as soon as possible, will that help me take out a loan in around 2/3 years time? I’m a student at the moment. And are there any companies you would recommend that would allow me to get a credit card?
I’m really confused and upset with what I’ve been put through and I’m very worried about the future for when I will need to take out a loan for a wedding and such things.
Please let me know if you have any advice, thank you.
Sara (Debt Camel) says
If you are thinking about a loan in a few years, then there is no hurry to get a credit builder card now. It will be easier to get a card when the Lowell debt is settled. If you can save up a few hundred, you may be able to make Lowell a full and final settlement offer.
No I cant suggest who give a student a credit card when they have a large defaulted debt – would you think you look like a sensible person to lend to? But the time your course has finished and you have a job and the Lowell debt is settled, things will be looking much better, so this isn’t something to really worry about at the moment.
KP says
Morning Sara,
I have a default on my credit file, which is 6yrs old on the 29/06/21. Once the date comes arrives, I am going to request it to be removed from my file. With this being the last negative marker on my file, I am hoping it raises my score as I am looking to buy a house. Will getting it removed make a major difference?
With all the advice on this great site, I have cleared debts and can finally see light at the end of the tunnel and in doing so, buying a house is now a realistic possibility. My credit score at its lowest was 280 but it is 514 as of today. I know I need to be around the 580 mark to get a mortgage.
Just wanted to say thanks for all you do, your advice is valuable and really does help. You have made me look differently at my finances and I am finally in control. Many many thanks.
Sara (Debt Camel) says
if a debt on your credit record has a default date of 29/06/21 then it will drop off at the end of the month. No need to ask for this to happen. It sounds as though your credit score should go up a lot – can you come back and say what happens?
KP says
Hi Sara,
I will certainly let you know what the negative marker coming off my file does to it.
Many thanks once again.
NG says
Hi, has it now dropped off. I’m going through exactly the same. My 6 year anniversary is 19th August 2021 and I am planning to apply for a mortgage quite. soon after. Just interested to know how long after the 6 year date, the credit reference details take to update. thanks
Marcus says
Good Afternoon.
I have only two Defaults on each of my reports for Capital One (two different Cards Luma & Aqua) applied back in Feb 2020.
I had been awaiting a PPI refund (Shop Direct) to clear the cards but despite FOS upholding & SD agreeing in Dec 2019, they payment was not forthcoming.
Unfortunately unemployment occurred and I reached out for help with Capital One, however the only option to go into default to accept the payment plan.
PPI payout was finally made Nov 2020 (delayed even further by the Pandemic) and I promptly paid both balances.
Recently I applied for a job I’m qualified for in finance, and was turned down due to inconsistent information on the Credit check they did.
Looking on my Experian, TransUnion & Equifax reports they all have the two Capital One entries.
Experian & Transunion have this recorded as a Default, with a Default Balance, Date and Satisfied Date.
The Equifax does not show a Default marker or a Default Date & one of the Default Balance is £0 – both entries have Satisfied Date a month apart.
Should I be concerned / challenge the inaccurate information they have recorded with Equifax?
Would it be worthwhile to plead to their good nature to remove or even amended the Default flags seeing both accounts ran perfectly for 5+yrs and was settled in full.
Sara (Debt Camel) says
I don’t know if this was the reason your employment was rejected – it sounds a bit extreme.
But all three CRAs should really show the same.
It seems worth asking for Capital one to remove the default and bring them in line with what was reported to Equifax. You can point out your long history as a good customer. I have no idea how likely this is to work, worst case if they take one look and change the Equifax record.
Andi says
Hi Sara,
I have a question for you in regards to defaults and Arrangement To Pay.
I remember seeing something a few months ago (can’t remember where) that if a person has missed payments and an arrangement to pay has been accepted by both parties, the “missed payment clock” starts again from the Arrangement date.
Which means that 3 or more consecutive missed arrangement payments would trigger a Default.
Is this correct or do I need to accept I’ve been in lockdown to long and officially lost the plot.
Sara (Debt Camel) says
Not sure where you saw that?
Could you say what your actual situation is?
Andi says
5mins after posting my message, I find the info.
It’s within a FOS case study from 2014 (Case study 117/12 – page 22 & 23)
Situation is Marbles (New Day) – I missed 3 payments middle of 2019, then caught up & requested a payment plan, in October so I could run the account down and close it.
Lost job in Jan 2020, applied for UC due to screw up at DWP’s I had no income for a month, as a result missed a payment.
Despite informing NewDay, I was sent a Default Notice Feb and the default was registered on all 3 reports.
Paid the debt off in full Sep 2020 and now marked as Satisfied.
I know if it would have been just a month later, I could have had a covid cover/plan :(
Sara (Debt Camel) says
so in October19 you had a payment plan – did that mean they had frozen interest?
Andi says
Correct.
Interest was frozen.
Agreed payment of £25pcm.
Missed one, and default issued.
Here’s the link to the FOS case study I mentioned:
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.financial-ombudsman.org.uk/files/2868/issue117.pdf&ved=2ahUKEwjXo__twI3xAhVz7OAKHXUcCdAQFjAAegQIBhAC&usg=AOvVaw0YkumTv6mdYOJOtbLgQu1S
Sara (Debt Camel) says
It looks a pretty normal situation to have added a default to me. They could have done this while you were actually in the payments plan.
Miss L’s situation in that case study was rather different as she didn’t have a payment plan in place at the time she missed a payment. So it looks like her bank added a default when she was only 1 month in arrears, which was wrong.
However your arrears were building up while you were in the payments plan, so you would have had more than 3 months arrears when you missed the January payment.
C chell says
Hi can you help I had a default in October 2016 I had car finance and after 6 mph my engine blow so I stopped payments as they wouldn’t fix car and I couldn’t afford my loan payment after 6 mths they decided too fix it but it was too late by then I was in arrears and the collection my car and billed me I tyres too sorry it but it went on my file .this made me very depressed as I was waiting a mortgage. Will this drop off my file nd year ? Or can I get it removed now and will it affect me getting a mortgage in a year or so
Sara (Debt Camel) says
what is the exact default date that shows on your credit record?
have you repaid this debt?
C chell says
I the date is 16 0to 2016 but the it was updated in 2018 .no iv not played anything I didn’t deal with the situation good as it made me depressed I tried sorting it but went round in a big circle
Sara (Debt Camel) says
I assume that was a typo for 16 Oct 2016?
If that is the default date (and it wasn’t changed in 2018 to something else) then it will drop off your credit record in October 2022.
BUT before this happens you may be contacted by a debt collector about repaying this debt, see https://debtcamel.co.uk/no-calls-or-letters-about-debt/. This often happens in the last year before a debt drops off.
It is a pity you did not take advice several years ago about this default. It can be harder to win a consumer complaint about problems with the car after so many years. I suggest you talk to Citizens Advice and ask them what your options are.
C chell says
Thank you .if it does drop off can I conplain? And will this effect my future credit .like a mortgage ECT
Sara (Debt Camel) says
I am not sure why you would complain that a debt has dropped off your credit record?
Kyle says
Hi Sara, wondering if you might have any advice on a situation I am in please. I had a credit card with Vanquis around 6 years ago and after a couple of years of being poorly managed it was sold to Arrow Global in early 2017. I had a token payment agreement set up with them for £2 per month on a balance of around £1200 but I only intermittently made payments and in June 2018 I stopped making payments completely.
I received a default notice in January 2021 so set up an arrangement for £10 per month, I misunderstood as I assumed this would prevent the default and I’ve made all payments since, however when I checked my last credit report they have opened up a new account on my file and registered it as a default dated February 2021. The account wasn’t reported at all prior to this.
I guess what I’d like to know is whether that default date is correct and whether it’s fair for them to open a new account purely to record a default? I think it’s very harsh that an agreement that broke down over 4 years ago has only recently been recorded as a default? I’ve made a formal complaint but they are now 6 of 8 weeks into looking into it. I also contacted Vanquis to see if they could put a default on dated 2017 but they said they can’t as the debt was sold on.
Any advice would be great. Thank you!
Sara (Debt Camel) says
Vanquis can a default back before or when the debt was sold – if they do Arrow has to use that. I suggest you go back to Vanquis and say your account was more than 3 months in arrears at the point it was sold so the SCOR rules say a default can be added. Say you will send the complaint to the Finacial Ombudsman if they do not agree to do this.
Arrow can add a default if they made a mistake in not adding one before. But if you made no payments since June 2018, then the default should be back then.
Kyle Jordan says
OK brilliant I will go back to Vanquis and say that. They told me previously that it was sold to Arrow as a non-defaulted account, does that make a difference?
Sara (Debt Camel) says
it doesn’t mean they can’t correct it.
Kyle says
OK thank you so much for getting back to me. I have emailed them everything suggested and I’ll let you know what happens.
Francis says
Hi Sara
I have an old ccj satisfied in my file. However there are 2 dates mentioned. first is filed date. And then the satisfied. Which date is used for the 6 years removal
Sara (Debt Camel) says
The date it was filed.
Shaun says
Hi
I had a loan with 118 118 money. I missed one payment in November 2019. I settled the loan in May 2021 with no issues. After checking my credit report in June 118 have just added the entire loan to my credit file ( it had never appeared before ) with a default notice on it which has hammered my credit score. I asked for a copy of the default notice which i never received, after spending an hour on the phone to them they said they couldn’t find a copy. I followed up my phone call with an email and then a week later I got a copy of the default notice which was dated 3 days after I missed the one payment. Which has now been added to my credit file in May 2021 for one missed payment in November 2019! I am going through a complaint with them at the moment. Where do I stand?
Thanks
Sara (Debt Camel) says
When you say you missed a payment, was it just late? did you pay this and get back on track?
You now have copy of the “Default Notice” – what did it say you had to do to remedy the breach?
Shaun says
Yes I repaid and got back on track (had a payment holiday due to Covid last summer) repaid the loan in full no additional charges etc. The default notice said I needed to make the missed payment by 26/11/19 which I didn’t do as never received the notice. Payment due date was 3/11/19. Eventually got caught up in spring 2020. Spoke to them on the phone several times a default notice was never mentioned just missing a payment could affect my credit rating which I knew obviously.
Thanks for your assistance.
Sara (Debt Camel) says
Do you think the loan was affordable? The definistion of affordable is that you could make all the payments and still pay your other debts, bills and living expenses. This is a test “at the time the loan was taken”, so later problems such as Covid are irrelevant, what matters is whether 118 should even have given you this loan?
Shaun says
Hi Sara,
I logged an affordability complaint with 118. Just received the SAR and they have my salary correct but all my expenditure is listed as £0. Everything from mortgage payments to food etc. I didn’t have any outgoings according to the SAR. Haven’t had chance to read through the rest yet. Thanks for all your assistance.
Sara (Debt Camel) says
out of curiosity, did you apply for this loan through ClearScore or some other third party?
Shaun says
I may have done I don’t remember to be honest. I’ve just checked my emails from when the loan was taken out and the only emails are from 118.
Thanks
Sara (Debt Camel) says
ok, so my theory is is it is in this situation that 118 have no expenditure info, because you did not apply directly to them. It does not excuse their giving you the loan if it was unaffordable, it just explains the zero figure.s.
If they come back and say the loan was affordable, ask them how they worked that out as they do not have any figures for your expenses…
Shaun says
Will do thanks again.
Shin M says
Hi there
I have a few missed payment markers from provident and shop direct throughout 2020. I made this payments on time however was on a repayment plan of £100 a month.
We are now trying for a mortgage and these payment markers which I had no idea existed on the report are causing great concern. I can show on the account that payments were made. In fact I was paying back more than I could afford just to clear the accounts.
Is there a way to have these payment markers removed. I have now settled all my accounts and completely debt free but these missed payment markets are a right pain!! Any advice will be greatly appreciated
thank you
Sara (Debt Camel) says
Being in a payment arrangement is usually recorded on your credit record even if you make all the agreed payments on time – it can sometimes show as months in arrears, or missed payments.
(The exception here is if the payment arrangement was because of Covid-19 – in this case no negative marks should show on your credit record.)
I am afraid that having been in a payment arrangement in 2020 will impact your chance of amortgage now. It is good you have settled the accounts and are debt free. But many lenders will want you to have had at least a year free of problem sbefore considering a mortgage, and if you have a low deposit like 10% some lenders will want longer.
One option that may help you in the future, but not right now is to make affordability complaints to Provident and Shop Direct. How many loans did you have from Provident before the last one with problems? Had Shop Direct increased your credit limit to a level that was too much for your income and other borrowings?
MO says
Hi Sara,
I recently accessed my Experian account.
However I noticed that barclaycard put a default date of June 2017 on my file although I stopped paying the initial creditcard in August 2016 when I left the UK. I got 6 warnings in 6 months as been late and in the 7th month, it shows up as Account in Default.
If it is 6 months thereabout and the account was tagged as default in the 7th month – January 2017, I am guessing that the default should be in January and not June 2017 as listed by barclaycard.
Hoist finance, the debt buyer also has the default date as June 2017. what should be the default date?
Thank You
Sara (Debt Camel) says
See https://debtcamel.co.uk/debt-default-date/ for more about what the default date should be and how to get this corrected.
But do you really care? Does moving the date by 6 months make much difference to you – are you intending to return to the UK?
MO says
Hi again Sarah,
Thank you for your response. I am due to be back in the UK in November.
For this particular debt I haven’t had any correspondence with the creditor or made any payments to the initial creditor since i left in August 2016. Likewise when it was passed to the debt buyer, no correspondence nor acknowledgement from me.
I am potentially looking at doing a 40% F&F settlement once I get to the UK and that is why I feel If the default date is closer I can have a stronger hand.
Sara (Debt Camel) says
ok, but if you want Hoist to change the default debt, that will acknowledge the debt and reset the statute barred clock…
Also read https://debtcamel.co.uk/ask-cca-agreement-for-debt/
MO says
Hi Sarah, can’t thank you enough.
Read through all the links you sent.
Now my action plan is to file off a CCA request 1-3 months when i get to the UK. Wait for 3 – 6 months (40-90 days) to see if they will find it,
a. if they find the CCA, offer a 40-60% F&F, if rejected severally, go on a minimum payment plan as the default will fall off by June 2023 according to them and then send a request to adjust the default date which pushes it down to Jan 2023.
b. if they do not find a CCA, offer a lower 30% F&F and ignore any attempt to enter a dmp if F&F offer not accepted. Send a request to adjust the default date back to 6 months earlier.
Does both option look OK? I followed all the advice on your articles.
Thank you once again. You have been a shining light to my day.
Sara (Debt Camel) says
If they find your CCA and you offer them 40-60%, they may not accept a minimum payment plan.
If the don’t find the CCA, then it’s up to you if you want to offer anything to settle it. 30% sounds like a lot to me for an unenforceable debt.
JT says
Hi, I enquired to credit agency why a Littlewoods account is still showing after 10 years on my file.Apparently they sod the debt to a debt collection company in 2014 who claim it is a non-defaulted debt and refuse to add a default date, so it destined to be on my file forever and impacting my rating, is this allowed? Thanks
Sara (Debt Camel) says
have you been making payments to this?
Ross says
My experian score has nosedived by 364 points, 350 of which I suspect are a default logged by a company that I am in discussions with to repay an existing debt. I emailed them yesterday evening asking if I could pay the balance in full two weeks on Friday as I’m desperate to avoid a default. Surprise surprise, less than two hours later and a default is logged on my file! Trying to call them to discuss it and it’s just ringing out, I honestly feel like they’ve done this out of spite. Do I have a leg to stand on regarding having it removed?
Sara (Debt Camel) says
have you missed payments to this debt? how many?
Reporting to Experian is done in batches by most firms, not in real-time. I think this was probably a coincidence.
Jay says
Hi Sara, I am hoping to apply for a mortgage soon but I have an unpaid default from an old overdraft with HSBC. The amount is £1031 and the date of default is August 2017. I have not used or accessed the account since approx 2014. This account is only showing on Transunion and it is showing as active and my score on Credit Karma is fair – 588 out of 710.
I raised a dispute on Credit Karma through Transunion but it was rejected. Should I contact HSBC to see if I can have the date of default changed or what do you think would be best to do? Should I log into the old account?
The defaulted overdraft is not showing on Experian or Equifax – Clearscore score is 448 out of 700 and Experian score is 980
Thank you.
Sara (Debt Camel) says
Overdrafts normally show on all three CRAs, so it sounds as though HSBC added a default to Experian and Equifax that was earlier than the one they added to TransUnion.
You can ask HSBC to correct the default date to be earlier. Of course they may ask you to clear the debt…
A debt with a default date more than 6 years ago may be statute barred – see https://debtcamel.co.uk/statute-barred-debt/ and talk to National Debtline if you want to try to argue to HSBC that the debt is statute barred.
Jay says
The unpaid overdraft has only ever shown on Transunion, not on Experian or Equifax.
The HSBC current account is still showing as open on Transunion and I have not used it or logged in online since 2014.
Do you think I should write to HSBC to ask them to change the default to the correct date? I am worried they will add their default to the other CRA’s if i contact them.
It also says on Transunion that the overdraft has decreased by £159 since September 2020 – it sounds like they have refunded me some money under the HSBC refund scheme. They have not contacted me as the address held for the account is my Australian address from when I was there from 2013-2015.
Is it possible to get a mortgage with an unpaid default from 2017? Do all mortgage companies use Transunion or do some just use the other CRAs?
Thanks for your help.
Jay
Sara (Debt Camel) says
I think you have to sort this debt out. If you contact HSBC they may want you to pay it and they may add it to the other two CRAs, but if the default date is corrected to be 2014 or 2015 the records will drop off.
You could only get a mortgage with an unpaid default at a dreadful rate of interest from a “bad credit lender”.
The large majority of mortgage lenders check all three CRAs.
Rebecca says
My mum put me in debt. and I’m currently paying 3 defaulted accounts because of it. I don’t want to get her in trouble but I also don’t want these defaults on my credit profile, can I pay them off and then speak to the lenders/collectors and ask for it to be removed?
Sara (Debt Camel) says
Sorry but it is very unlikely this will work.
There is no way for a lender to know if you are telling the truth in this situation if you are not prepared to report it to Action Fraud. Anyone could say this had happened to them.
Nigel says
How much compensation should I ask for?
What happend In brief, they rewrite both loans, this was all resolved November last year remove default,they put in error, due to payment hoidlays £ 200 compensation
Anyway January this year, in error they sent me almost 4k, to my bank instead of rewritten back to their own. I informed then soon I knew
They have only got the money back now, 6 months later, even though it left my account day after I told them, reason it took so long even though I kept contacting them is we finally got to bottom of it, they said it was sent it error but never put on the immdentity claim until now to get money back, hence my bank put it in a holding account.
every month defult would happen, and mess up my credit ratinh, which I had to let them know, then it would build up again, then it would remove mess up my credit rating.
The manager that took over was very helpful and we talk by email, but there wasn’t much he could until money came back.
The manager is asking how much I would accpect as acccptable to resolve this for me,Off course I want the max amount however I don’t want to seem to greedy either, it’s been very stressful for 6 months always getting defaults, not being able to apply for anything cards mortgage etc
Sara (Debt Camel) says
It’s really hard to put a number on the hassle this has caused you. £500?
Realistically you stood no chance of getting a mortgage since January. or indeed credit at a resonable rate, so not being able to get any has probably done you a big favour, letting you clear off a big chunk of debt.
Nigel says
What if I ask him to suggest the amount? As the manager is aware of everything so he will be in best postion to give a reasonable amount.
The only reason I haven’t just incase it’s really small unless I ask for more.
Sara (Debt Camel) says
I can’t guess how this game of poker will proceed. I have NO idea what number the manager is likely to be thinking of.
Claire says
Hi Sara, on my credit karma report I already have a CCJ from avant- as I could not afford to pay it at the time, TM legal were the solicitor receiving my payments for the CCJ this as now been sold to Perch Ltd and has been added on to my credit report so now shows the value as outstanding aswel as the CCJ. should both show on my credit file? Thank you
Sara (Debt Camel) says
yes, that is what should be shown.
Was the Avant loan unaffordable for you from the start?
If you can win an affordability complaint against Avant, you may be able to get the default deleted and the CCJ removed.
Claire says
Thanks Sara, I did a irresponsible lending claim a few years back before I was aware of these affordability claims and the process and they rejected my complaint I never sent it to the financial ombudsman as I didn’t fully understand the process when I sent an affordability complaint last year they said I had already had a final response off them which was relating to the irresponsible lending claim so I don’t think I can do anything further which I am kicking myself for now.
Sara (Debt Camel) says
Oh dear. Unless their first rejection failed to mention that you could go to the Ombudsman, there is nothing you can do now.
John says
Hi Sara,
I am currently stuck in the middle between Stepchange and blackhorse finance.
Last month I completed a DMP which I believed stepchange had settled the money outstanding to blackhorse.
To my horror I have discovered an active default from blackhorse to whom I returned the vehicle in question in January 2018.
I called stepchange who say they were told by blackhorse they were no longer pursuing me for the debt so stepchange could stop sending payment.
Stepchange believe on that basis blackhorse should remove the default and if they will not I should dispute it.
Are stepchange correct?
Many thanks
Sara (Debt Camel) says
so the car finance debt has been in your DMP since Jan 18?
before this default, the record for this car finance debt was showing what – 6 months arrears/ a payment arrangement ?
how are the rest of your debts in your DMP going – how many are settled? how many are still running?
John Tankard says
Correct yes the car finance arrears have been with the dmp since Jan 2018 yes I believe it was about 8 months of arrears.
All other debts on dmp are repaid and the dmp finished last month
Dan v says
Hi I have just had a notice of default sums on my credit card due to me stupidly having the right amount in my account and it going over the credit limit. I received a text saying it was going to go over the credit limit unless I made a payment that day which I did but it didn’t go through in time so have been charged 12 pounds which I’m not too bothered about and my account is now in my credit limit. Is this the same as a default on my credit record?
Sara (Debt Camel) says
No it isn’t the same as a default on your credit record.
Having a maxed out credit card however does affect your credit score, see https://debtcamel.co.uk/credit-score-change/. Can you stop using thus card and try to overpay the minimums each month for a while?
Dan v says
Yes I know. I am doing this and I just didn’t check properly this month. My income is going to increase quite a bit in September so am planning to sort out the credit utilization of the card then. I just really didn’t want another default! Will the default of sums be reported on my credit file?
Sara (Debt Camel) says
The Default of Sums itself is not shown on a credit record. It sounds as though you were only late paying it by a day? In that can it may not be reported as a late payment.
Dan v says
I actually paid it the same day but it only went through the next day. When I rang them they said I had till midnight to pay to avoid this which I did and was still charged. This is quite annoying.
It was interest that took me over credit limit. I’ve not missed any payments with them
Linda says
Hi there, I have a few defaults that are becoming an issue as I can’t get a mortgage. Would I be better to pay these off, or leave them as is? I’m concerned reading that if I pay them off they will stay for 6 years after that date. For example one drafty account that shows in default from Nov 2019, if I clear that will it look better to lenders than it just sitting in default?
Sara (Debt Camel) says
Defaults will drop off 6 years after the default date, whether you pay them in full, in part or not at all.
It is very hard to get a mortgage with unpaid defaults on your credit record. But if you settle them now, most mortgage lenders will still want to wait at least a year before they think you are OK for a mortgage.
Can you argue any of the defaults were for unaffordable debt? eg the Drafty one? If you win an affordability complaint, the default will be deleted…
Linda Davidson says
Thanks for the reply. I Already put affordability complaints in with drafty, 118 and oakbrook as they where taken in a desperate time and within months of eachother without any checks being done. When I done it was suffering from depression and each came back saying tough luck. I should have taken it to the ombudsman at the time but my mental health was too bad.. I assume it’s not possible to try again?
Sara (Debt Camel) says
if that was more than 6 months ago, no, it’s too late.
Nigel says
For a rewritten loan do the miss payments disappear, and you start a fresh, because I have one rewritten and no miss payments on it, where’s before I had about 6.
And what do mortgage lenders think of rewritten loans
Sara (Debt Camel) says
I don’t know what a “re-written loan” is. So far as I know it is not a term used in credit reporting.
Nigel says
What I mean by rewritten loan is, I had a payment hoilday, they said after it finished, they could right brand new loans and close old ones, then they refused because of arrers anyway after a complaint they did it.
Now during a payment hoilday they said we will remove the miss payments, during hoilday but not before, but as it’s been closed seems like all miss payments removed
Also do mortgate lenders ask why you had payment hoilday,if loans are closed?
Sara (Debt Camel) says
as it’s been closed seems like all miss payments removed
isn’t that what you want?
Also do mortgate lenders ask why you had payment hoilday,if loans are closed?
Ir is up to each individual lender what they care about and when they want to ask more questions. I know that isn’t helpful but I am not sure what else I can say. If you need a mortgage / remortgage, go through a good broker and explain your situation.
Adam Frank says
Hi,
I have an old bank account with RBS that I have never used in years. I have recently had a letter stating that they will issue a default for the overdraft of £2633 (that’s including fees and interest……. I hadn’t even realised this was the case as I don’t use the account).
My question is, this account has never been registered with any credit reference agency and there is no trace of it any where I.e. previous balances etc. Can they just add a default like this?
Thanks
Sara (Debt Camel) says
When was this account opened?
Were you aware there was a balance owing? how many years has it been since you used this account?
Do you have financial problems and so were ignoring this account or are you fine and you just forgot it?
Did you expect the balance to be much much lower so you think this is mostly added charges/
Jennie says
I currently have a default on my account with 118money, it’s been two years now and I was able to have the account settled and pay off the remaining balance, I would like to get this removed as it is still impacting my score, I saw that you said I could email regarding that I could not afford the debt in the first place. I was 21 when I withdrew this loan and a student with a weekend job. Is there anything else I can say to make my case stronger? Thank you so much for your articles, it’s really helped me over the years
Sara (Debt Camel) says
Read https://debtcamel.co.uk/refunds-large-high-cost-loans/. You need to make an “affordability complaint” and ask for ta refund of the interest you paid.
Cleaning your credit record is a “side effect” of winning this complaint. It is NOT easier if you only ask for the negative mark removed – lenders are not supposed to do that unless there is a very good reason. So you to make a full affordability complaint.
118 are losing a lot of these cases at the Ombudsman. A student with a weekend job sounds like a good complaint to me!
Peter says
Hi,
I wonder if you can help me. I recently checked my credit report and saw that i have a default for a debt sold to a debt management company. Essentially, I changed my car to a new one in March this year, as part of this I paid off my current PCP and took out a new one with the same dealer. As part of this process my previous car was used to pay off the previous car. However, a month or so later I received an email from the finance company saying i owed them a missed payment (which i can only assume was the final one, but I am not sure as as far as i was concerned i paid all outstanding monies and the credit company stopped the direct debit). Anyway, the credit company subsequently sold this on to a debt company who I paid this final amount assuming that would be the end of the matter. Due to a personal matter I wasn’t really on top of the situation.
My thinking:
1. As far as I was concerned my contract with the credit company for car A was fulfilled when I signed my agreement for the new car and, as far as i was concerned, settled the remaining balance
2. It is one payment, although not paid straight away, I was never in arears during the life of the contract and not 3 months in arrears
I previously had a good credit report which has now plummeted due to this situation which I am hoping can be reversed.
Sara (Debt Camel) says
Did you ever establish WHY this extra payment was owed? Had the finance company ever sent you anything in writing showing the account fir the first car was closed?
It may only be one payment but if it is left unpaid for months after you are aware of it then a default is fair. It would not be fair if you had not been informed about the Blanche owed and paid it as soon as you were aware.
Abdul says
Hello,
A question about overdrafts and default dates, please.
I have an overdraft I defaulted on in mid-2017, and the bank has specified a default date in May 2017, but the account is still showing as open on all my credit reports.
Will this overdraft drop off in six years, or will it continue to be shown as open and payments missed?
Sara (Debt Camel) says
the bank has specified a default date in May 2017
where was this specified?
are you still using the account?
Abdul says
Thank you, Sara.
Specified in a letter sent to me back in 2017 and also showing up on all three credit reports (Clearscore, etc.).
Not using the account anymore and nothing paid in since late 2016 (ie 6 or 7 months before the default date).
The account is still showing up as open on the credit reports, and I wonder whether the default will drop off from the reports after six years or not..
Sara (Debt Camel) says
so the account is showing as defaulted with that default date on the credit reports? (These may sound like questions you have already answered, but people can losely use the word “default” to mean many things.)
If there is a default date on a credit report, the record will drop off after 6 years. Settled, still being repaid, or not being paid, it will still drop off.
Of course it is quite likely that it will be sold to a debt collector before then who will go for a CCJ if you don’t set up a payment arrangement.
Abdul says
Thank you. Sure, I appreciate there may be some action brought by the lender.
Alex says
Hi Sara. I hope you can help. I recently checked all my credit reports from all cra’s and to my horror found an “adverse account” with ikano. Looking further into this I have noticed 4 late payments recorded in 2012 and 2013 only on experian (one marked as 2, the others.as 1) The account was closed in 2018. Experian is refusing to remove these until 6 years pass from closing the account. That would mean I will have the marks on for a total of 12 years! Having contacted them they have no intention of removing them as the financial regulators are ok with this behaviour? I want to take a mortgage Next year and I am losing sleep over these. Many thanks, Alex
Sara (Debt Camel) says
Those were very short term payment problems a long time in the past. I suggest you apply for a mortgage through a good broker and I would be surprised if you have a big problem because of this.
frank williams says
hi sarah
i won a claim with the financial ombudsman against morses club plc in 09/19 for mis-sold loans and was awarded £ 8493 and as part of the agreement all info on my credit report was to be removed as it is adverse, nearly 2 years the info has still not been removed and is affecting me getting main stream credit. i complained again to the ombudsman in 07/20 that the credit files have not been amended but have only had a bog standard reply giving me a ref no, i followed up in march this year and again in july but have not had any sort of reply from ombudsman,and am looking to see what my options are because the defaults have another 2 years until the 6 year limit and don’t see this as fair because the problem arose when the morses club agent stopped collecting the payments.
thanks
Sara (Debt Camel) says
So you made a complaint to Morses about this and took it to FOS? I think you should phone FOS up and complain – say you are complaining the lender did not abide by a p[revious FOS decision and because of this you think it should be handled promptly.
I hope you are asking for compensation from Morses for the time and hassle for this.
frank williams says
thanks sarah
i have already complained to ombudsman and followed this up with 2 further emails asking about my case and explaining the urgency of the issue but a year later have heard nothing back from ombudsman, and their is no option with the ombudsman to complain about lack of action apart from sending an email to them which they just ignore. plus i will be seeking suitable redress from morses club if the issue is ever resolved by ombudsman i don’t see what else i can do until then.
Sara (Debt Camel) says
Well you can insist on making a complaint about their slowness…
Kris maddox says
Hi Sara.
I’m sorry if you have answered this before. I have just found that I have outstanding vehicle finance from a car I returned to the lender, due to mechanical issues, in 2018. I thought, due to the mechanical issues that I was clear and moved house soon after. However, I have just over 2k showing as delinquent from Aug 2018(acgually, first missed payment is marked as Jan 2019, but I stopped paying in Jun 2018, the missing 6 months are showing no data). I am about to come into some money that would allow me to settle or completely pay off this debt and be able to have a deposit for a house. I am wondering what you advise on approaching this. Also, why do you think they didn’t default me. This is worrying me because of the delinquency issue.
Sara (Debt Camel) says
I can’t tell from this if you have a good consumer complaint about the car which means there should not be any missed payments recorded. You could discuss this with your local Citizens Advice.
Or you could phone them up and say you were unaware of the debt, you think you have good reason to dispute the debt, but you are happy to pay it if they remove the missed payment markers from your credit record. I don’t know if that is likely to work or not.
Kris Maddox says
Thanks for the response.. I had a complaint in with the garage, not the finance company, then when deciding to surrender the car I explained to the finance company why I had done. I thought this was enough at the time but am not so naive now. I will try the approach you advise but if they say no then would you advise an offer of settlement of Completely clear the debt?
Sara (Debt Camel) says
Unless the debt is settled, you will find it very hard to get a mortgage – it will be difficult even when it is settled as the settlement is recent.
Andi says
Hi Sara, yep me again
Question for you about Default on Credit Card.
I’ve been unsuccessful (so far) getting them removed with capital one.
I have looked over a SAR from April 2021 they provided and noticed a discrepancy with the opening / closing bal in 2016 on the account extract (letter says it’s a summary of the info which would be on my monthly statement).
It’s a £28 difference, but doesnt correct itself.
Speaking with CapOne, they can see for the month concerned 7 debits, where as the extract shows 2.
Now as this extract is included as a SAR, and confirmed it’s statement history – where do I stand, saying who is right and who is wrong.
In months after this discrepancy overlimt charges have been applied, but if you deduct the £28 – I’m within Credit (So far 130 charges upto Oct 2017)
Sara (Debt Camel) says
So you are saying they incorrectly added overlimit charges? That is worth contesting – ask for them to be refunded.
Whether it means the default was wrong, depends on how much you paid them.
Andi says
It all depends on which document is correct..
Their System tells me this 28.00 is not a discrepancy, but the SAR extract (that states it’s a reflection of the information that would of been on statements) show that if the 28 is removed from the balances I’ve had 21 X £12 from March 2016 to April 2018 (still typing it up, got 12 more pages yet)
Who would the FOS side with…
Capital ones Transaction screen’s OR
The SAR extract provided by and certified as true by Capital One.
Sara (Debt Camel) says
I have no idea. What was your limit at this time? Was it to high for you? It might be easier to complain about that as well… the multiple over limit charges being evidence that you had been given too much credit to be able to repay it.
Andi says
Limit was only £200
It was a credit repair card (Ocean)
Limit wasn’t high, it’s just that this £28 has screwed with the whole account and essential they owe me in Overlimit charges £400 alone.
I’ve also got late payment charge applied, where it says Minimum payment required was zero!
Sara (Debt Camel) says
Well you could try disputing the over limit charges if they are inaccurate. Then suggest that the default was unfair because of those unfair charges.
Jade says
Hi Sara
I recently settled an old barclaycard debt which was sold onto link financial. We had written to barclaycard using a template letter I had seen online asking for the default to be backdated as we were defaulted almost 18 Months after entering a DMP. We asked for the default to be backdated to 2014 which would mean it would drop off our file.
Barclaycard agreed right away to do this however months down the line we have realised that link financial are still reporting it. Barclaycard say they’ve done what I asked them to do but link are saying that they will continue to report until September next year as originally advised by barclaycard when the debt was sold.
Link say they need some evidence that barclaycard have agreed to backdate it but barclaycard say they can’t send me a letter/any evidence??
I’m about to write letters of complaint to both companies? Do you know who is responsible in this situation?
Sara (Debt Camel) says
Barclaycard agreed right away to do this
was this by email, secure message or in a letter?
Jade says
I was contacted by their customer services department via telephone. The whole conversation was via telephone.
When I called barclaycard last week they were able to give me the original complaint reference number and confirmed that they had backdated the default date with the credit reference agencies.
I don’t have anything on writing though
Sara (Debt Camel) says
Then you need to ask Barclaycard to put in writing to you what they have done a – tell them Link are disputing this and you need something to show to link. If Barclaycard refuse, put in a complaint about this…
Maureen Smith says
Jade, I had exactly this a few months ago, I send a new complaint letter to Barclays and Link and they sorted it out within a month.
Marco Phillips says
Hi Sara,
Firstly thanks for this amazing blog/site it is really helpful.
This is what happened to me and I’d like to see what my ground would be to ask for Goodwill from my lender (Barclaycard).
A few years ago I fell in to set back and I wasn’t not able to pay my credit card for a few months (I believe 5 at least that is what credit karma is showing) after a few call from my creditor and explaining them my situation I got the last one from a lady that demanded for a payment I at that stage mentioned I just started a job that same week and that I would be able to set a repayment as soon as I get paid. The lady said she wanted money now or she would default me. I told her I could not pay any money right now. It doesn’t sound like she was having a good day, I was younger and stupider and replied with – Do what you have to do. Next month my first Defaulted month. I spoke to the creditor and set a 4 month repayment which I stick to and the account was closed 4 months later last Default on the record show (May).
I was wondering if young stupidity.
Even tho there is less than a year left for the mark to clear (hopefully fingers crossed) I have a feeling you never know with this I would still like some consideration.
Sara (Debt Camel) says
if the default goes in less than a year, then if it is removed, the missed payments will still show for another 4 months – the account will drop 6 years after it was closed.
Is this really worth it?
I have a feeling you never know with this
what are you worried about?
Marco Phillips says
I am worried of my credit rating not improving soon as I may need it for a mortgage.
And that feeling of really not knowing if this will clear, when it will clear and how is it really affecting my credit rating right now.
Thanks
\M
Sara (Debt Camel) says
You don’t have a good case for it being removed. And goodwill gestures aren’t that common. It’s up to you if you want To ask for this, but as the problem debt will then show for several months longer, it’s not even clear this would be to your advantage.
The default really will go. When there is a default date, this is automatic.
But the default was settled more than 4 years ago – if the rest of your credit record is fine and you have an OK deposit you may well be able to get a mortgage now. Talk to a good broker.
Marco Phillips says
This is what credit Karma is showing me
PAYMENT INFORMATION
Opening balance
£0
Repayment frequency
Monthly
Date of default
24 Feb 2016
Promotional rate
No
PAYMENT HISTORY
J F M A M J J A S O N D
2016 X D D D D
2015
v OK
x Missed payment
— No data
D Defaulted
H Payment Holiday
A Arrangement to pay
I got a question from what you said,
what do you mean with “but as the problem debt will then show for several months longer”
The rest of my credit record is fine as far as I am aware I just not passing a certain point no matter what I do so I am suspecting that is because this negative mark.
Will the default go May 2022 – and from then onward my credit rating will start building up normally, provided I have no more issues?
Thanks,
\M
Sara (Debt Camel) says
The rest of my credit record is fine as far as I am aware I just not passing a certain point no matter what I do so I am suspecting that is because this negative mark.
If the default is deleted, the arrears and missed payment will remain. This will show until 6 years after the settlement date of the credit record.
Sara (Debt Camel) says
the whole debt will disappear 6 years after the default date – 24 Feb 2016
Nicolle says
Hi Sara,
I’ve gone through quite a few comments trying to clear my query and am getting too much information (if there’s such a thing!). Thank you for the site by the way, your replies are extremely helpful.
My question is: I have a default showing on clearscore for a BT bill I missed when I moved house , dated August 2020. After chasing BT I finally managed to pay it in May this year and was advised the default would be updated on my credit file. Nothing has happened and before I start tearing my hair out trying to speak to someone who knows anything at BT, could you please let me know, who should I contact regarding this? BT, or Experian? Will the default status be updated? I appreciate it’ll still be there, but I’m sure I read somewhere the status would be changed to “resolved”?
Thank you very much in advance.
Nicolle
Sara (Debt Camel) says
You contact BT. If you contact Experian, they will just ask BT, so that wastes time.
Also ClearScore reports on Equifax data, not Experian… If you go to BT you should ask them to correct all your CRAs records, Experian, Equifax and TransUnion.
The default will, unfortunately, remain on your credit record. But the balance should show as zero and the status should be changed to Satisfied.