A reader asked:
I know a debt drops off my credit file 6 years after it was settled or defaulted. I just want to ask when I apply for a mortgage, can the lender dig up unpaid debts if they are no longer showing on my credit report?
This is a common question. The answer is Yes, sometimes because a lender can see other information that may show the debts.
Let’s look at what the lender can see, so you can tell if you need to be worried about this.
But first, make sure that you have checked your credit records with Experian, Equifax and TransUnion – the three Credit Reference Agencies (CRAs). Not all creditors report to the same CRA, so if you only look at one report, you may miss something important on a different report. See How to check your credit records for free for how to do this.
Mortgage lenders also look at your bank statements
Credit records are just one source of information for a lender – they are not the only thing that matters.
Most mortgage lenders want to see the last three months of bank statements, some ask for six months.
These statements show if you are making payments to debts that are no longer on your credit record. That could be payments to the original creditor, to a debt collector or to a debt management firm.
A lender can’t see payments that are no longer being made, either because the debt is repaid or because you just stopped paying…
But it’s not safe to stop paying a debt just because it has dropped off your credit record. See Do I have to keep paying this old debt? for details.
Unless a debt is very old and statute barred or it’s unenforceable because the creditor doesn’t have the right documentation, you should be aiming to pay off problem debts where there have been defaults before a mortgage application. This could be with a full and final settlement – this won’t cause the debt to reappear on your credit record.
Lenders have their own internal records
Lenders can also look at their own internal records.
A lender may also be able to see records from other parts of the same banking group, so an application to Halifax could perhaps be affected if you had had an old problem debt with Lloyds.
There is no legal maximum time on how long a lender can keep these for – they don’t have to delete them 6 years after a debt has been settled or written off. Banks can keep data for a very long time – PPI claims have been settled for debts that were repaid more than 15 years ago.
So a lender may be able to tell if you defaulted on a debt, you went bankrupt or had an IVA, or you settled a debt with a partial settlement.
Some lenders may not mind if your debt problems were a long time ago, but you can’t assume they don’t know about them!
Who to apply to?
I always suggest that people should go to a mortgage broker.
Even if you have never had a debt problem in your life and have a great credit record, a good broker can still find mortgage deals that you may not be able to see and can smooth the way through what can be a stressful process.
This is even more important when you have had previous debt problems. Old problems may not be a problem at all for many lenders, but why take the risk? If you just apply to bank X, you may find out the hard way that bank X can see that old problem, cares about it and is going to turn you down because of it.
So tell a good broker about all your previous debt problems and you can get good advice on which lender to apply to. See Should you get a mortgage adviser? for how to choose a mortgage broker.
Improve your credit score for a mortgage
Credit score worries can make your debts worse
FAQs on statute barred debt
vanitha says
hi
only one debt 10 years , I am paying DMP , still show the credit file negative mark, how can I remove this.
I have no job, I am sick, my husband look after me.
please advice me.
thanks
Vanitha
Sara (Debt Camel) says
Can I ask what this problem debt is?
Your DMP, how much do you owe?
Are you buying a house or renting?
Gary says
Hello. I have been suffering with a gambling problem for sometime now. As a result I have recently had a number of defaults.against cards etc which i have used to fund my habit. My partner doesnt know the full extent of the issue and I have left her out of it for now. What i want to know it how this affects my current mortgage. Our mortgage is together but we have no ither joint accounts etc. My current account is my own and my wife has her own too. Our morgage come s out her account too.
Will my defaults affect her score or our future mortgage. We havd stayed with the same mortgage lender for the last 10years. Would appreciate some advice.
Sara (Debt Camel) says
As you have a joint mortgage, you are financially linked on credit records. Your defaults will be harming her credit score. I suggest it is better for you to tell her now rather than let her find out at some point when she is declined for credit and checks her credit record to see why. It may help if you can show you have a practical plan to stop gambling and repay your problems debts.
Your current mortgage won’t be affected but if you have a fixed rate, it is likely to be very hard to remortgage with anyone else. You may still be able to get a new fix from your current lender. This also needs to be explained to your wife.
Paddy says
Hi
I had an IVA that failed a couple of months in because lenders couldn’t agree on changes to repayments when I lost my job, this happened over 10 years ago and is no longer on any credit file. Will this make my chances low of getting a mortgage and do I have to declare it?
Sara (Debt Camel) says
What happened to the debts in it?
Paddy says
Unfortunately they never got settled and are all now off my record as well. Since they dropped off my file I have made a conscious effort to never let that occur again and raised my score up to excellent. In addition I’ve put together a 12% deposit on a property now.
Louise says
Hi Sara
I entered into a DMP in 2013. All but two Barclays accounts were defaulted. The two Barclay cards were marked with AP markers, I was advised to remove them from the DMP as these markers would stay on for 6 years from settlement. I settled the DMP 12 months ago, all defaults have fallen off. The AP markers are 4.5 years old and have had all green ticks since. ( They are only showing on my TU credit report). We are looking to move house and take out a new mortgage, Will these AP markers be a problem? Could they lead to further questions about the DMP and the fact that the remaining debts were only settled 12 months ago? (none are on any of the three report). I have had my current mortage for 13 years and never missed a payment. All other credit lines have been maintained and kept up to date with no issues at all.
Sara (Debt Camel) says
I was advised to remove them from the DMP as these markers would stay on for 6 years from settlement
Who advised this? Why didn’t you just ask Barclaycard to add defaults?
Louise says
Clarke Richards the company has since gone bust and I’m not entirely sure there advise was the best but two credit cards have been paid up every month and on my Experian report they are totally fine and Equifax and green ticks all the way for the full report. TransUnion is showing 42 green ticks to date
Louise says
Do you think I will be able to get a mortgage at an ok rate with these markers? Will they ask for details of the old dmp?
Sara (Debt Camel) says
yeah, it sounds like very poor advice. But you are where you are. I think those payment arrangements look pretty old. My guess is they won’t prompt lenders to enquire about your DMp. But I think you should talk to a broker about your options and tell them the full background.
Louise says
Thank you. The actual dmp was settled 12 months ago. Do you think if they did ask that 12 months is enough time to have lapsed?
Sara (Debt Camel) says
Many lenders use a rule similar to “a default is ok if it was over 3 years ago and was settled more than a year ago”. But this is why you go to a broker, to avoid lenders who might care.
Louise says
Thank you so much. Would this be at a high rate? Or do you think I could get close to the normal rate
Sara (Debt Camel) says
I think you should get a normal rate, perhaps not the best.
Louise says
Thank you so much. This website is so helpful. I really appreciate your response and the speed of them too. Thank you
Louise says
One last question…is a dmp classes as a “voluntary arrangement”. I have seen on some mortgage applications they ask have you entered into a voluntary arrangement in the last 6 years.
Sara (Debt Camel) says
They are asking about an IVA which is a form of insolvency.
Amanda dunn says
Hi, I’m trying to obtain endowment policy statement info from an insurance provider from 23years ago, without any success, any suggestions.
Sara (Debt Camel) says
Sorry, no.
Paddy says
Hey Sara
Apologies for bumping this, so if the debts fell off my credit file and the IVA fell through this will harm my chances of getting a mortgage?
(little bit of back story, this all happened at a time straight after I left university and the 2008 credit crisis happened, I lost my job after building up debt to move to London for it so there was a bit but afterwards I wad working for minimum wage so couldn’t afford to repay lenders)
Sarah says
Hi Sara, I have been separated for five years from my partner who left me with mortgage £630 a month and debts, debts were a credit card @ 3k, a loan 23k at £629 a month, and a very account of £2.200, plus dfs £900. I defaulted on all these 4.5 years ago. I’m seeking to remortgage by myself now, house worth approx 180k, mortgage 114k. I have partially settled loan at £5.300 though still owed £14k. Credit score 733 on experian. Do I have a chance? Also have credit cards at 5k that I have been maintaining payments happily. I am wondering what is the best way to raise credit score, as mortgage due within next two years. And divorce going through, and ex husband to be is happy to hand house over, due to mortgage being 135k and nearly £30k in debts when he left, which only I have paid. Any advice would be appreciated. Also can a credit card still be in the default accounts on credit file, if this sold to link and they state it as a default already. Credit card company have stated that it sold on. I thought this would of moved to settled accounts?
Sarah says
Last few years, my husband has kept him name on mortgage, so product change is what we have completed since break up. I can afford repayments, never any issues paying mortgage or priority debts. I can show evidence that shows I have maintained payments on my own also.
Sara (Debt Camel) says
The loan you partially settled – was this from the same lender as your mortgage?
Have you repaid the 3k defaulted credit card, the Very and DFS accounts?
“mortgage due within next two years. ”
do you mean you have an interest only mortgage that is ending?
or a mortgage fix that s ending?
or you have agreed to get your ex’s name off the mortgage in this timescale but it isn’t the mortgage itself that is ending?
It sounds as though the 3k credit card was sold to Link. In that case the car lender should have your balanced marked as defaulted and satisfied and link should have added an identiacl debt with the same degault date showing an open balance. Is thsi what has happened?
Sarah says
It has just come out of 2y set mortgage fixed repayment, this month it will be on a variable base rate. Very, dfs, and link I am still paying. Very is now £464/ they have offered me option to pay £280 to partially settle debt, this will take another two years to drop off credit files dfs which doesn’t show up on credit file is £146/ partial payment I have been offered is £80. Link I still owe £1465, no news if they would accept partial payment to close account. I need to remortgage this time in my own name. As I understand ex husband wants to move on himself too. I have had one offer off a lender that set for two years, interest rate would be 4.69, then rises to 5.9 above whatever interest rate it is in two years. I’m not sure if I can accept this as, I am wary that in two years that I would be able to lend off a high street lender, and the rate they would set in two years is way above what I may be able to afford. Loan i partially paid two days ago was to nationwaide and the current mortgage I’m with is halifax.
Sara (Debt Camel) says
what is the variable rate you will be paying? You aren’t going to be able to remortgage at a reasonable rate with unsettled defaults on your credit record.
probably only your current mortgage lender would be likely to offer you an OK rate at the moment. And they may refuse because they prefer the security of having your ex on the mortgage as well.
Sarah says
Variable rate will be 3.78%, I can maintain these payments at present. Do I not accept the partial payments on the defaults left? As they may make borrowing worse. Do I ask ex for a year reprieve on keeping to current mortgage and pushing to pay these defaults paid fully? and credit cards paid off also. As this could help me look more financially viable? With the offer of a mortgage I had, they would of been willing to borrow me amount to pay of all debts and credit card bills too. Still dubious if I pay all off, that I will be stuck with this company long after the two year set rate is finished. I’m confused to what I should do. Sorry I know I am very confusing.
Sara (Debt Camel) says
All the defaults drop off in 2 years? At that point it will have made no difference at all if you settle them fully or partially as mortgage lenders won’t be able to see.
Before that point, you may be able to get a mortgage at an OK rate if you have settled all the debts – fully or partially, more than a year before. so if you can settle them all now, then you could probably get a mortgage in a years time. (Caveat – who knows what the house will be worth or what the mortgage market will be then.) Settling the defaulted debts is more important than settling the credit cards, but you don’t want your credit card balances to increase. Can you just stop using the cards and repay a bit more than the minimum each month?
Your ex presumably can’t afford to get a mortgage himself so what is the hurry? Apart from the fact you would like to be rid of this last tie, i do understand that.
At the moment all these defaulted debts are at 0% interest and your house is not at risk. It would be VERY foolish to mortgage to cover these debts, especially at a poor rate of interest. Bad credit mortgage lenders always say “it’s just for a couple of years” but there is no guarantee you will be able to mortgage at a good rate in future and you could be stuck paying an expensive mortgage for a long while.
Sarah says
Thank you so much. He Believes I am affecting his credit rating and his will rise when he not tied to me. As I took on debts myself, he has had it easy. I was hoping more to have mortgage in my own name, before divorce finalised and Incase, he splits with gf or he then dicides that he owed a settlement figure, and if I pay the debts off. He may then state he payed half of these. Which would not be true. I will follow this advice, many thanks for your patience, you have been a huge help in knowing where to start in my financial affairs. I will now hold off, even trying with my current mortgage to get his name taken off or remortgage on my own, as I don’t wnat to ruin my chances for when defaults paid and my credit cards lowered. And also credit score raises to a better level. Once again thank you so much
Sara (Debt Camel) says
I think this is a difficult situation – I had assumed you had a written agreement with him about the house and your debts.
David J says
Hi, I have a few defaults & 2 ccj’s on my credit report, they are due to fall off approx 3 years IF i have paid them off by then, Am i able to apply for a mortgage, also what happens regarding my credit score. Does it go back to normal or will it remain low like it is at the minute, Would love to apply for a mortgage just worried it will be high rate!!!
Sara (Debt Camel) says
Defaults and CCJs will fall off your credit report whether they have been paid or not. And then your credit score will look great. If the debts have all been repaid or settled, you will then be able to get a mortgage at a normal rate.
You need to get a plan for your debts, not hope they will all go away and you can get a mortgage…
Lisa says
I had a 3 credit accounts that i defaulted on over 7 years ago, since when i have been paying a fixed fee every month to reduce the balances – none are showing on my credit file, but i am still paying the balances. I am looking to apply for a mortgage, will these impact on my mortgage application?
Sara (Debt Camel) says
yes they will, because the lender will see the payments you are making to them on your bank statements.
You could make them a settlement offer?
what sort of debts were these and are they now with debt collectors?
Jon Jones says
Hi,
I recently had some miscommunication with my energy supplier about a final bill which led to missed payments. This is recorded on my credit report as a recent late payment. Prior to this I had never paid late and this is visible on my credit report. Will that have an impact on applying for a mortgage? I have spoken to the provider and they say there is nothing they can do. Should I add a notice of correction? I am applying for a joint mortgage with my partner who has an excellent credit score.
Sara (Debt Camel) says
What sort of miscommunication?
Jon Jones says
I had believed I set up a direct debit and one payment went out and no further went out. I then was contacted by a credit collectors to make payments, the account is now paid off but it shows as late payments. It was simply a misunderstanding and lack of communication.
Sara (Debt Camel) says
Have you asked your bank if a direct debit was set up? If any DD payments weren’t made because there was enough money in your account?
Jon Jones says
I’ve contacted the bank and npower and it seems there’s nothing they can do to assist. Will this have a huge impact on a joint mortgage application? I do believe npower could assist but I don’t seem to be getting anywhere.
Sara (Debt Camel) says
Well if it’s one late payment it may not be too bad, but the current mortgage market is very difficult. It may all come down to how large a deposit you have.
Mandy says
Hi there,
I have a very old DMP and none of the accounts show on my credit files. I’ve checked the big four credit agencies via a multi-check website. I have signed into my DMP and can see that they still have my previous address. However, that address is very much a linked address on my credit file. I want to do some work to possibly seek settlements and get this old DMP shut down/paid off but don’t want to ruin my now very healthy credit score. If i update my address, will these historical debts ruin my current score and suddenly appear on the file? I want to apply for a mortgage (got an agreement in principle). I started the plan in 2004 but am paying very little, very slowly!!!
Sara (Debt Camel) says
The ancient debts may not show because they had default dates of more than 6 years ago.
So the bad news is that almost all mortgage lenders want to see your bank statements and they will show the payment to the DMP, won’t they? So your mortgage may be rejected because of that.
What sort of debts were in your DMP – loans, credit cards. overdrafts, mobiles, or what?
Gareth says
I have had a Dmp for around 9 years so they no longer show on my credit file. One idem just shows as linked to my spouse. My original debt was 90k, I did manage to settle half 4 years ago with the ones who accepted a settlement. I have 5 left and a balance of 27k. What I want to know is I have found they from a creditor reply none of the remaining can supply an original agreement.
My question is I have some funds and want to offer a settlement rather than just risk not paying for the nest 6 years and them reappear. What percentage would you suggest offering and should I suggest if they do not accept the offer I will stop paying.
Once settle with my credit improve quickly as nothing actually shows on my credit file and currently my rating is just below good.
Thank you in advance for your assistance.
Sara (Debt Camel) says
One idem just shows as linked to my spouse.
Can you explain more about this?
So you have asked the 5 remaining for a copy of CCA agreement and none of them can pruce it?
If they find it again (which after a 9 year DMP is pretty unlikely), the debt cannot reappear on your credit record.
If you want to make an offer, it may be best to first stop paying so they know you are serious. Then after a couple of months offer say a 5% settlement. But if the debt is not showing on your credit file, there seems little point in this.
Are you trying to get a mortgage?
If nothing shows on your credit record, nothing you do will have any impact on your credit score.
Gareth says
Hi Sarah,
Details of the idem connection:
Financial connections
These are people with whom you’ve shared a financial connection according to your TransUnion credit report.
MRS XXXXXXXXXXXXXXXXXXXX
Reported by Idem
Originated on 20 Mar 2013
Confirmed on 01 Apr 2003
Should I dispute this?
Yes none of the remaining creditors can produce a CCA
Yes I want to remortgage as I am on a self-cert still and paying 5% interest.
So if the debt have dropped off my credit searches and they are unenforceable to be clear that means that the creditors cannot do anything to affect my credit rating?
The Idem is one of the creditors which shows as a connection, is this impacting our credit scores?
And finally you suggest do not even bother offering any money as there is no advantage and after 6 years they cannot come after me and the worst case they find a contract and I just have to make a new arrangement?
Finally do I just tell stepchange that I wish to close my DMP? Do I have to give them a reason.
Thank you so much for your advice.
Sara (Debt Camel) says
Do you have a joint mortgage with your wife? Any other joint accounts? What is her credit rating like?
So if the debt have dropped off my credit searches and they are unenforceable to be clear that means that the creditors cannot do anything to affect my credit rating?
That is correct. Of course if the debt collector goes to court you would have to defend the court case, but this is very unlikely to happen, especially if you don’t ignore letters that are threatening court action but respond saying that they agreed on dd/mm/yy that the debt is unenforceable.
It would be polite to tell StepChange that all the debts are unenforceable so you are ending your DMP. Why not?
You can talk to a mortgage broker but the safe thing may be to not apply for a mortgage until you have 6 months of bank statements showing no payments to StepChange or to the creditors of the unenforceable agreements.
Gareth says
Hi, So the idem debt was a joint overdraft and has a balance of approx £1000, I could clear this or make a suitable offer if it is advantageous, again I do have a letter say it is unenforceable and it is with Hoist/Robinsonsway.
Credit ratings vary, so for me
Clearscore 417 (On stable Ground) wife – Clearscore 446 (looking bright)
Experian 977 wife – Experian 974
Karma 583 wife- Karma 596
I do not understand why these vary so much.
I have just paid my credit card I use so it is at 50% or less today, it only has a 2k limit and is not included within the dmp and has always been in good standing. Is it worth setting up individual LOQBOX to improve credit more?
Should I get another credit card or ask for my existing limit to be raised used even though I do not use it?
On our joint account we have £1000 OD, we use it but never go over it, it clears fully every month and gets used every month. I can clear it but thought it may be better to keep it as I thought it would help our credit scores.
Neither of us have any debts, my wife uses a next account for the kids clothes which goes up to 450 and down and I have the mentioned credit card with a 2k limit.
Sara (Debt Camel) says
is your mortgage a joint mortgage?
You have a letter saying an overdraft debt is unenforceable? That is unusual.
Don’t get another credit card! You need to get the balance on the current one down to zero and after that set it so it is repaid in full every month so you never pay interest.
Using an overdraft doesn’t help your credit score. Having it there unused is much better.
Does your wife may the next account off every month in full?
Gareth says
Hi. Yes Mortage is joint.
Yes I thought an overdraft debt could not be unenforceable that is why I am thinking I should strike a deal on it as it is not a lot of money and shows up as a connection.
No my wife does not pay off her next account every month but I presume you are going to say she should. I will clear all debts and then use them and pay them off every month going forward. With this then hopefully make our credit score better. Should we be ok to try for a mainstream Mortage in six months. Should I cancel the overdraft or is it better to just not use it?
Thanks
Thanks again
Sara (Debt Camel) says
It isn’t clear to me why this link for the old idem debt shows. In this sort of situation where there may be some error, it is hard to say how to “correct” it as it shouldn’t have happened. It’s not clear that clearing the overdraft and closing the account will help but it’s hardto see how it could hurt your position.
In general it is better for all credit cards, catalogues and overdrafts to have credit available but not use it. For credit cards using it every month and repaying in full is best. For overdrafts having it available and never dipping into it all is best. what % deposit will you have for a mortgage in 6 months?
Gareth says
It is a re-mortage, i owe £230k and the house is valued at £450k
i also have 70k in shares un isa’s but i do not want to touch it
Sara (Debt Camel) says
Well keeping the shares is your choice but you can effectively get 5% tax-free by paying a chunk off your mortgage… just a thought…
I suggest you talk to a mortgage adviser now about your options if your self employment income has held up well over the last 6 months.
Gareth says
Thank you very much for your assistance it has been very helpful ;)
Tom says
Hey there,
I took out a few payday loans a few years back, the last being 7 years ago. These have now all disappeared off of all my credit files with Experian, Equifax and TransUnion. Will a mortgage lender still be able to see that I have taken these out in the past and potentially hamper an application or am I in the clear and they won’t be able to see any of them?
Thanks,
Tom
Sara (Debt Camel) says
As the article above explains, there are two situations where a lender can see things which aren’t on your credit record – where they (or another part of the same group of banks) were the lender you had problems with and when your payments to a creditor show on your bank statements.
The first doesn’t apply to these payday loans. And I assume you finished paying the loans a long while ago so the second doesn’t either.
Peter says
Hello fos are wanting an old credit report from 2015 I made a member of credit karma but it not showing old reports only old loans what part are they looking for there don’t explain very well its for a Moneybarn complaint thanks peter
Sara (Debt Camel) says
FOS only want your current credit report – almost no-one has old credit reports to send.
The best one to send is the statutory TransUnion report – it is less pretty than Credit Karma but it’s easier to downloan anjd send to FOS and has the same data.
Get it here https://www.transunionstatreport.co.uk/CreditReport/AboutYou
PS I will move this comment to https://debtcamel.co.uk/refunds-large-high-cost-loans/ in a day or so at it is more relevant.
Paul K says
Hi Sara
I have 5 debts that I made arrangements with to halt interest and to pay in monthly installments over 10 years ago. In around 2 years they will all have been paid in full. However, I’d like to remortgage sooner than that. I have been given partial settlement offers but am worried they will then appear on my credit report. If they were defaulted over 6 years ago, I believe that wouldn’t matter but I can’t find out if any were ever defaulted (the debts have been bought several times by different credit agencies). What would you advise? Avoid partial settlement at this stage and either pay in full or pay over 2 years?
Thanks in advance
Paul
Sara (Debt Camel) says
Have you checked all three credit reference agencies to see if any of the debts currently show? See https://debtcamel.co.uk/best-way-to-check-credit-score/ for how t do this.