This default is destroying my credit score – how do I get rid of it? This is a very common question!
It’s sometimes people ask if their finances have improved and they are trying to clean up old problems on their credit history as fast as possible. Sometimes it is 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. If there are practical steps, then you can take them yourself. 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.
The rules about when debts disappear from your credit record
There are three credit reference agencies (CRAs) in Britain – Experian, Equifax and Call Credit. They all apply the same two rules that determine when a debt is deleted from a credit file:
- a debt that doesn’t have a default 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 stays for six years from the default date. This applies whatever happens to the debt after the default – 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. I suggest you should check your records with all three CRAs so you know exactly what they say.
“I agree with the default, but six years! That’s ages!”
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.
There is nothing you can do to make the default go away sooner. You can add a Note to your credit file, which explains why the problem arose. And 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 actually improve your credit score, but it may mean that lenders, especially mortgage lenders, are more prepared to give you credit.
“The default was added very late”
The principles that govern what should be reported to the credit reference agencies 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 won’t be deleted, but it should be changed to be earlier so it will drop off your file sooner. See my article “What should the default date for a debt be?” which describes how to get your record corrected.
“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 ICO if the lender refuses to correct it, see the above article about what the default date should be for details.
“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 compared to what you should have paid reach 3-6 months. What you have set up is called a “debt management plan” even if it was just an informal agreement with one lender. See How does a DMP affect my credit rating for more details.
Also although you may hate that default, you will often be better off with it, rather 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 is normal. What matters is the original default date, it will drop off six years after that. The later defaults don’t make your credit rating worse because lenders’ scoring systems only look at the first default.
“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 ICO if necessary.
“I never owed this money”
In this case, you need to ask the lender to delete either the whole record (if the debt never belonged to you at all, it is some form of mistaken identity) or the default (if it was your account but you were never in arrears).
“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 became aware of 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 a lender will admit – or a court may decide – that a debt isn’t enforceable. If this is because it is statute barred, then a default should have been added to the debt over six years ago so you should ask for the default date to be changed so that it is earlier.
But if it is unenforceable for other reasons, the debt still exists and the lender may refuse to delete it from your record because you do still owe the money.
“I should never have been given the loan!”
Until two years ago I would have said you will find it hard to make this argument work… but since then many thousands of payday loan defaults have been deleted from credit records, see this article from Experian about Wonga loans.
If you think you had payday loans that were “unaffordable” (you could only repay them by borrowing again each month) ask for a refund of interest you paid and also ask for any defaults or late payments markers to be deleted from your credit file. How to ask for a payday loan refund looks at these affordability complaints in details – the template letters in that article have worked for thousands of people.
Here is a comment from a reader who made a successful complaint againt Satsuma, a payday lender:
I accepted Satsuma’s offer on 2nd January and received the cheque on 17th January. The negative information already 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 starting to be recognised as a serious problem, see this report from Citizens Advice. 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.
Summary – when can you get rid of defaults
If the default doesn’t comply with the “3-6 months arrears” rule then you can ask for it to be corrected. But if the default is in line with the “3-6 months arrears”, there isn’t normally anything you can do about it except wait for it to get older and then drop off.
Pay a defaulted account to help credit score?
Is an unknown debt on your credit file?
Can you get a mortgage with debts?
John says
Ok, thanks for your help – sounds like I have something to work with – I’m guessing the late payments after the original default should have rolled into the original default with the date staying as it was.
Js2018 says
Can I just check something?
I have received a Noddle notification saying Peachy have added a default to my credit file.
This has been expected, as although I have a repayment arrangement they have said I wasn’t paying enough to avoid further action.
My question is. Is a default valid if I have not received an actual default notice referring to Consumer credit act 1974 etc from the creditor?
I have received fairly standard letters from them stating that I have fallen behind and failure to remedy may resort in Legal Action, CCJ etc, but no official default notice. Don’t get me wrong, a default notice may arrive in post soon, but if it doesn’t, then where do I stand legally?
Can I request this is removed as no default notice or information sheets have been sent to me prior to default being added, therefor not giving me opportunity to clear the debt before default applied?
Sara (Debt Camel) says
A Default Notice as defined in CCA 1974 has NOTHING to do with having a default added to your credit record. A creditor has to issue a Default Notice before going to court for a CCJ, they do not have to issue one before adding a default to your credit record, so not having had one is not grounds for asking for the default to be removed.
BUT have you heard about affordability complaints? You may have grounds for arguing that Peachy gave you unaffordable loan(s) – if you win an affordability complaint, interest will be removed from your current balance, you may get a refund that will further reduce the balance if you had previous loans from Peachy and any negative marks should be removed from your credit record. See https://debtcamel.co.uk/payday-loan-refunds/ for how to do this.
Richard Pearson says
I wrote to Vanquis in May requesting a copy of my original credit agreement and statements from 2010 when the debt was added to my DMP. I asked them to amend the default date to Dec 2010 as it was in default when it went to Stepchange. The letter was sent on 24/5. I heard nothing within the required 30 days. I am a vulnerable person as I suffer from various health conditions including mental health issues due to having major brain surgery. The debt was passed to a debt company in 2013 but it seems they were writing to an old address. However, I started to receive letters at my current address from the debt company and on contact with them, they advised that they were collecting the debt for Vanquis. 35 days after my original Vanquis request, I received a letter refusing to supply the information as there was no proof of my current address. I ceased payments in June through the DMP as per the advice on the CAB website. I wrote again in July, enclosing a letter from the debt company who are managing the debt on their behalf, to prove my address. They were requesting a copy of my bank statements which I am reluctant to send as they are online and if lost, could leave me open to id fraud or worse. After 40 days, still no response so we sent a complaint to the ICO. We had asked Vanquis to correct the default data via Noddle, but they refused. Today, I have received a letter from Vanquis again refusing to supply the information and requesting bank statements.
Sara (Debt Camel) says
You seem to be caught up in some data protection issue. I am afraid much the simplest thing will be for you to send them a bank statement to confirm your address.
Richard Pearson says
Thanks Sara, the problem being that my bank statements are sent to a friends address as we live in a holiday caravan where mail has not always reached us and been returned by the site. Our bills go to the other address too, as this is a requirement of the site owners. I have told them that we would wait until the ICO reply was received. I have taken the payments to the company managing my account from my DMP and advised them as well. Our friend calls us when we receive mail, but it is a half an hour journey each way.
Jenwri says
GDPR are huge and a company will be fined heavily for breaching them. However, they do not need to comply with your request for data Whilst there is doubt over your identity. Article 15 GDPR give you the right to access your data. DPA 2018 sect 45 (3) gives them an applicable period of mostly 30 days, but the clock doesnt begin to took until you confirm your identity Whilst there are doubts. The problems with your address mean they have done nothing wrong and they likely wont recieve any redress until you send them what they have asked for
Sara (Debt Camel) says
I think you need to phone Vanquis up. Explain your health problems and that you need to be treated as a vulnerable customer. explain the problems with your addresses and ask them how these can be resolved so you get the information that you want.
John says
This relates to a credit card i forgot to pay a small balance off. I have no issues in paying this. £40 fees were added before it was transferred to link 23/11/17. on 29/11 I contacted coop bank It transpired the bank had not updated my address when I moved three years earlier. They dispute this.
I offered to pay the outstanding balance there and then but not the fees. This was refused as the account was with link. Two complaints were fobbed off. and are with the FOS on appeal. At no time did coop register a default or even mention sending a default notice or any other documentation to my old address or otherwise.
By February I was in dialogue with Link. I offered them the same principle amount but continued to dispute the fees . Despite letters asking for payments there has been no formal demands or threats of action. Link now refuse to correspond with me hiding behind a complaint outcome letter.
My view is that they should have had to issue a default notice in these circumstances particularly as non receipt of documents is
At the heart of it.
This has the feel of the disproportionate use of a default as a means of blackmailing me to pay fees that are disputed and should, be determined by the small claims court?
My main concern now is getting this default removed.
Sara (Debt Camel) says
When did you actually fail to pay the credit card?
Link are right not to talk to you while there is a FOS case ongoing.
What are the coop disputing, that you had told them that you had moved? Why is this relevant if Yiu kept payingbthe cc after your move, were you getting digital statements as presumably paper ones wouldn’t have got to you?
John says
Hi Sara
Answers below. I had to chop the submission
1. This was summer 2017
2. Link keep chasing me to make payments but won’t listen when I explain this is still disputed. They have been told several times about what I’m willing to pay and what I’m not.
Sorry if I’m missing something but why would they take the action they have on one hand but not talk to me on the other?
3.yes – coop say I didn’t tell them I say I did. This is the second instance where they failed to update my details post 2012. When they transferred the account to link they even have them the wrong address.
4. Partially. I accessed the account digitally but didn’t get digital statements.
Thanks
Sara (Debt Camel) says
Ignore Link (unless they do something bonkers like passing your case to their lawyers and sending you a Letter before Actio/Claim – don’t ignore that buts it’s VERY unlikely), this needs to be resolved with the coop, then Link will get sorted.
How did you tell coop you had moved, phone, email, secure message? If written, do you have a copy?
So were you not aware that you weren’t receiving cc statements? How did you miss a payment? (I’m not saying you don’t have a case, just trying to clarify it!)
John says
Hi Sara
I wish it were that simple but in registering a default on my credit reference profile they have, certainly in my view, done something bonkers. This has already caused one credit rejection and I’m due to re fix my mortgage this month. Prior to this I had a perfect credit history.
I’ve had two issues with coop about not changing addresses. On both occasions done by phone. Of note my mobile number was current throughout this entire period.
CC statements weren’t something I looked for or needed. This was a seldom used card that I used as a one off for a triathlon entry fee. I split the costs over a few months and thought I’d paid it off. I hadn’t. Simply down to a mistake I made.
With no statements coming on paper I just assumed this was because I used the web in preference. I expected to receive a letter if I’d missed a payment – none arrived and so far as I was concerned They had my current address.
I was in dialogue with both them and link within a week of the debt being sold (I rang up to ask why my card was being declined).
Sara (Debt Camel) says
i Hear what you are saying but the second mole way to get this resolved is via the complaint against the coop. If that is resolved with the FOS in your favour, the default should be removed.
John says
So sit and wait?
Would you expect it to be resolved in my favour based on what I have told you? What would you advise if rejected?
Thank
Sara (Debt Camel) says
I think it looks marginal. You did forget to repay the balance. It can be tricky to prove they should have known you had moved.
John says
Thanks Sara. Most appreciated
Im hopeful on that point.
Longevity of my mobile no they say they rang – my only mobile no since 2011.
Rang the same number home number 30 times without realising it was disconnected
Didn’t ring my work number which was correct
No checks or human intervention.
Previous history
And providing my previous addresses (the ex wife) to Link; not even the one that they claim they though I was at. Have raised that as DPA though due to the possible implications of revealing financial difficulty to the ex!
Im firmly of the view this is all because of a successful PPI claim 3 months previous.
Again thank you for your advice. I will update once I get certainty
Sarah says
I had default notices sent to a previous address – can I get them removed as I didn’t actually receive them? I asked the company who sent them, they said no, I should have updated my details with them – is there anything else I can do?
Sara (Debt Camel) says
There is nothing you can do unless there is some other reason you can argue the defaults are unfair – see the article above.
Vll says
I have received letter from Sainsbury’s bank and then today had default on credit file last payment was was 2006 and now Oct 2018 have had no contact since 2009 contacted Sainsbury’s admitt error but has trashed credit rating
HELP!
Sara (Debt Camel) says
Is this an overdraft, a credit card or a loan? So you are saying there was a balance owing but it is now statute barred?
Has this been on your credit record all along, but not defaulted? Or was it defaulted then dropped off and has now come back with a new default?
Ben says
Ive been talking with cabot about an alleged debt from 2014. They say i owe the black horse about 700. As far as i can see the account was settled. I have asked cabot for the appropriate things CCA, Accounts, default notice etc. They didnt have any of this and asked for me to give them 3 months to go to the Blackhorse.
This was back in March. I’ve heard nothing until now. I keep getting texts to call them. Then today i received a letter from the blackhorse saying the owed me 270 in redress.
My issue is i have a mortgage going through. Cabot removed the default in March because i said it was wrong which i still believe is true. I am wary of contacting Cabot for them to put the default back on. Do i just settle the debt – I’m loathed to do it and ask them not to touch my CF or do I wait and see what happens. It could be automated and a coincidence they have both been in touch recently.
Thanks,
Ben
Sara (Debt Camel) says
I think the contact from Blackhorse probably is a coincidence. Several of the banks have low key (ie not well publicised) redress schemes underway at the moment eg https://debtcamel.co.uk/barclays-refund-customers-arrears/ which is an article about Braclays but if you look at the Comments at the bottom, there are several from people who have had Lloyds refunds out of the blue.
Cabot have had plenty of time since March to get this sorted. Did they just delete the default, or did they remove the whole debt from your credit record?
Ben says
Cabot removed the whole debt.
They said they would contact me on 5 weeks, which they did then they said they hadn’t been able to get the info.
They said they would contact me within 16 weeks. The initial query was 28th February and so the 16 weeks was up on 20 June 2018. So they’ve had nearly 6 months.
Sara (Debt Camel) says
You have three options:
1. You could write to Cabot and say unless they can produce the information you have asked for, you will not be paying them as you do not believe there is any money owing, and tell them to stop texting you. But with a mortgage going through this feels a bit like poking a sleeping lion?
2. You could simply ignore it as a few texts seems quite low level. If they do produce any evidence that there is a balance, you could pay it.
3. You could pay it. But I can’t see any reason to settle the debt until they produce any evidence and the longer this goes on the less likely that seems. It’s worrying having a mortgage going through but there is no guarantee you will get a better result by paying it than by ignoring it. The debt may reappear on your credit record if you do pay it on the grounds that you are no longer disputing it.
It’s a generalisation, but a firm that is convinced the debt is correct and they expect to be able to prove it doesn’t normally delete the record with the CRA.
Ben Gascoigne says
To be honest I think I will let sleeping dogs lie. Unless they provide me with something – i honestly don’t think they can.
Hopefully the mortgage goes through then I can go back to them and sort it out. I thought it was unusual to delete it from my CF, it only reaffirmed what I believe.
I’m wondering whether to send a SAR to Black Horse. I haven’t done that because I was waiting for Cabot to come back to me, i just don’t want to stir anything up.
Thanks Sara.
Richard Pearson says
I am in the same situation. I requested a copy of statements from Blackhorse and Cabot as I am being assisted to sort out all of my debts. Payments seem to be going on forever. I assume it has been defaulted and the default has now dropped off. I suspect that Black Horse have been adding charges which I wish to refer to the Ombudsman. I wrote in May but despite letters saying they are waiting for a response, Cabot has not sent anything. I have removed it from my Stepchange account, I guess the only thing I can do is wait.
Sara (Debt Camel) says
Did you write in May to Blackhorse? What have they replied?
Richard Pearson says
They have not responded. I sent it first class signed for but heard nothing for them. It was a loan for 2k taken out in 2007, I took out a DMP in June 2010. The balance to date is 1036 so they must have been adding charges.
Sara (Debt Camel) says
Send them a complaint then. Email is better than a letter if you can find an address.
Be specific – say you have asked for X and Y. Give details about your and the loan if you can – a/c or loan number, name, address now, address then, date of birth, NI number anything else that will help them identify you. Also say you think they carried on adding charges after your DMP with StepChange started and you would like these refunded. Take it to the Ombudsmna if you haven’t had a reply within 8 weeks.
Lili says
Hello
I have a defaulted credit card with Capital One. It’s defaulted from the last 2-3 weeks time but I didn’t have the chance to do anything by now because my mother had an emergency surgery and it was a very hard time.
The account has defaulted because it seems I have paid £2 less than the agreed. They sent a letter but I never received it because I moved out from the address they have on the file.
I am trying to dispute my case with the Financial Ombudsman now. But I just received an email that they don’t think it’s fair to dispute it and they think Capital One is right about the Default.
Please, advice what I can do further?
Many thanks
Sara (Debt Camel) says
Sorry I find this a bit confusing, can you answer the following questions:
When was this default added to your credit record?
Before this were you making normal payments, or did you have an arrangement to pay?
Are you saying you had paid them, but just £2 less?
Did you complain to Ca[pital One? When?
When did you complain to the Ombudsman?
Lili says
Sorry about that! It seems I wasn’t clear on many things, sorry! Here are the answers:
When was this default added to your credit record?- the last month- September around 15-20th
Before this were you making normal payments, or did you have an arrangement to pay?- I had an arrangement as I had some family health problems and I experienced some financial difficulties.
Are you saying you had paid them, but just £2 less?- yes, they asked from the amount of £30 monthly but it seems they wrote £32 in the record ( and the letter which I never received) and I paid £30 ( just £2 difference) and a few days after that I wanted to pay extra £50 but I wasnt able to. Then, I realized that my account has defaulted.
Did you complain to Capital One? When?- yes, I think it was on September 11 when I found out that my account has defaulted.
When did you complain to the Ombudsman?- I think it was a week ago.
Thank you so much, Sara!
Your help is much appreciated!
Many thanks
Lili
Jodie says
I have recently tried to get a mortgage but was told that I couldn’t because of a default payment with Vanquis from the 27th September 2017 which means it will still be on my credit file for another 5 years.
Reading some of your advice above you mentioned about payday loans and “I should never have been given the loan”
I was approached in a shopping mall 2 days before Christmas by a sales rep for Vanquis credit. I originally said no to her because I had a very poor credit rating and I didn’t have a job so I didn’t think I would be eligible. She however, thought I would be so she convinced me to apply and she was right. I was accepted even though I was in debt at the time with numerous store cards and was out of work. I feel I was a very vulnerable person and was easily coerced into this with the fact I had no income and it was so close to Christmas which is a known time when people overspend. Do I have a case with this to get the default removed or would I be wasting my time and just need to wait to apply again for a mortgage in 5 years when it will be removed?
Julie says
Are you able to help?
In the last week I have been contacted daily by a collection agency for a debt of around £90 from 4 and a half years ago. I have ignored the calls and letters and have made no acknowledgement.
If I continue to ignore this for the next year and a half will this drop off my credit report and be the end or can this be followed up at any time with something that might further affect my credit score etc?
Sara (Debt Camel) says
If you continue to ignore it the debt itself will drop off in a year and a half BUT it is highly likely that before then the debt collector will have gone to court to get a CCJ, which will then wreck your credit rating for another 6 years.
Your options: ignore it and hope to fight the CCJ in court (do you have a potential defence?), pay it all, make an arrangement to pay it monthly at an affordable amount (do you have other problem debts?) or to offer them an amount in final settlement of the debt.
Steve says
Hi Everyone,
I have started to look at my credit file in more detail and actually take an interest. I didn’t in the past and oh boy, what an experience. I have a few defaults which I didn’t know I had, so looking to kick start some ninja work on these bad boys.
Anyway, the situation is that I had a Virgin Media account in excess of 6years. I closed the account and was going to another provider (sky). I was waiting on a final bill which turned up after a few weeks which was duly paid. On checking my report, it shows on my credit file that the last payment is noted as late by 1 month, followed by the 2nd month as default.
Has the organisation (Virgin Media) not treated me fairly by applying the default after one month? do they have to a “give time to pay”? I read on this site that the default is normally applied after 3 months or more.
Any advise would be greatly appreciated.
Excellent site too. :)
Thanks
Sara (Debt Camel) says
“I was waiting on a final bill which turned up after a few weeks which was duly paid”
what date was your previous payment to them before the last one?
what date is the default date showing on your credit record?
what date was your last payment?
what date is the debt shown as settled/satisfied on your credit record?
steve says
Hi Sara,
To be honest, I don’t know the dates exactly as it was 3 years ago. My credit file shows paid, then 1 month late, then the following month default. I normally get the bill about the 13th and I paid this normally about the 27th however I don’t know when my last payment was.
The default date was 29/07/2015
Sara (Debt Camel) says
The dates matter if you are trying to argue that your credit record is inaccurate. I suggest you dig out your bank statements which should show the payments.
Steve says
The default date was 29/07/2015
Steve says
I was checking other reports, clearscore and its not defaulted and show fully paid and closed. Does this give me weight?
Thank you