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 how to do this – the three ways i recommend are all free.
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
Fleur says
21.6% on 1st
22.59% on the 2nd
7.35% on the 3rd
20.42% on the 4th
13.54% on the 5th
21.39% on the 6th
17.77% on the 7th
All the above paid off
my active loan of £6800 is 2.9%
and basically, my clutch went on my car, then my gear box, then my gear box again as it was fitted incorrectly, then 4 new tyres… then i was in a car accident and the car was written off so the other 2 were to help with a new car
mortgage is currently 2.19%
Thanks !
Sara (Debt Camel) says
OK so these loans will not be flagged as “payday loans” on your credit record.
If you are trying to get a new fix from your current mortgage lender, the lender may not even notice them and you may have no problems at all.
If you try to get a remortgage with a different lender, they will do a much more thorough check. 7 loans in such quick succession may look odd, or the lender may not care as you didn’t miss payments and the mortgage is low compared to your income. Sorry I can’t guess.
Fleur says
Thank you,
Can you confirm something for me?
When you apply for a morgage and they search your credit file..
Can they only see hard searches or soft searches and hard searches?
Thank you
Sara (Debt Camel) says
soft searches are only visible to you
Fleur says
Thank you,
How many hard searches are you allowed in a 12 month period? Totally money is saying I have 12, dating back from June 2021
Will this massively effect getting approved for a mortgage? By the time my renewal comes round I’ll need a mortgage of £39,000. I earn £31,000 and my partner earns £35,000, he has a perfectly clean credit score with zero searches. Our house was valued at £360,000 nearly 5 years ago. So it is a minimal mortgage. And the property is probably worth around £400,000+ now.
Thank you
Sara (Debt Camel) says
I don’t think you are likely to have much problem!
Claire Mc says
Hello, great website!
I had one default on a credit card which was applied over 7 years ago and not on the credit report anymore. I went down the CCA route with the company that purchased the debt about a year ago and they didn’t have the agreement and admitted it is unenforceable. So I’ve not made payment to this in 13 months and they’ve left me alone. I had an appointment with mortgage broker last night, and told him to avoid the bank in question and any bank under their umbrella as they would probably have internal records and he said that’s fine, he’s applied for an AIP with nationwide which went through fine; he didn’t ask for proof of unenforceable debt as he said it doesn’t matter as it’s not on credit report and I’m not paying it so doesn’t count. Should I be worried about this coming up in underwriting? I know nationwide have no link to the bank but just worried that maybe they should’ve been told that I did default once upon a time, even tho I don’t think this was a question they even asked to be honest.
Sara (Debt Camel) says
Underwriters don’t have a secret database of old debts they can access. if it isn’t on your credit record and payments to it don’t show on any of your bank statements they ask for, how could they know about this?
You need to answer any questions honestly. but I don’t know of a lender that asks if you have ever defaulted on anything!
Michaela says
Hi!!
I have a question which may or may not be straight forward…
I had one default which fell off my credit file on the 8th January 2023 (defaulted 8th Jan 2016). It was with a credit card. I won’t be applying to that lender.
My credit score has shot up as I’ve had no missed payments or any adverse in 6 years.
I’m thinking of getting a AIP with Halifax. My question is, how long would/should you leave it before applying, I have all of my statutory credit reports and the adverse no longer shows. And the debt itself is paid off so there are no payments on my bank statements for over 3 years.
Guessing there isn’t an answer for every lender but in general how long should I wait before applying for safety?
Sara (Debt Camel) says
I can’t see why you should not apply now, but I always suggest people go through a mortgage broker who is best placed to advise you.
Carly M says
Can’t sleep! We had a mortgage agreed in principle. I think our broker has made an error as the lending criteria stipulates IVA must be 6 years post discharge. Mine is only 2 years post discharge. Should I mention this or go through to full application and hope it doesn’t get picked up?
Sara (Debt Camel) says
Oh go back to the broker. If this is going to be a reject you need to know now, not after you have wasted moneys on solicitors and surveys etc
There will be another lender that isn’t so fussy.
Carly M says
Thanks for your swift reply Sara. The Iva isn’t even showing in my credit file at all. I actually forgot about it. Will the lender see this?
Sara (Debt Camel) says
It’s fraud to give an incorrect answer to that question. Not a good idea. You are at a really early stage – best sort this now by telling the broker.
Whether the lender would know may depend on the debts in the IVA and whether the lender has any connection with those creditors.
Carly M says
Thank you so much. I will explain to the broker. Thanks
D says
My son is just in the middle of applying for their first mortgage. They are both in secure employment, they have no debts and seemingly good credit reports.
When he was a student in 2019 he took over responsibility for the house utility bills – when he moved out he thought that these had all been settled and transferred to the ex housemates. He was shocked to receive a letter from a collection agency 3 years later requesting payment of £150 to the electric/gas provider.for a period after he had left. This was paid immediately and the collection agent advised that it would not affect his credit rating. Nothing is showing on his Clearscore record and they have received a Mortgage in Principle offer but he is now worried that this payment will still affect an actual offer. Please could you advise
Sara (Debt Camel) says
So the first and urgent thing is for him to chheck the other credit reference agency reports.
ClearScore only shows Equifax date – some lenders and utlities only report to one of the other two CRAs, Experian and TransUnion.
See https://debtcamel.co.uk/best-way-to-check-credit-score/ which explains that MSEs Credit Club and Credit Karma are free reports that will let him see if there is anything reported on Experian or TransUnion.
If there is nothing showing on either of those reports, then this may well be fine. If the mortgage lender sees the payment to the supplier on his bank statements, well it just looks like he was paying a normal bill. A payment to a debt collector however may raise some questions.
Emma says
Hi, husband received a letter in around 2013 from a debt collection company re an old credit card debt that had been sold. He agreed to pay £50 a month which he did until it finished this January with no missed payments.
We’re now applying for a mortgage having not even thought about this being an issue, the broker has suggested this is a debt management plan, and that will affect the application as it was paid off so recently.
Is this correct? It doesn’t appear on the credit file nor does the original debt as it was from so long ago.
If we wait until 3 months clear bank statements from the final payment would this come up? Not sure where we would disclose as not IVA or CCJ.
Sara (Debt Camel) says
The mortgage lender will be able to see it from your bank statements. Lenders usually view payment arrangements in exactly the same way as a Debt Managemen Plan.
Providing it doesn’t show on your bank statements, and you are not applying to a lender that is part of the same group that gave him the original credit card, you should be fine. But some lenders ask for 6 months bank statements. Talk to your broker about this.
Emma says
Thanks for your reply. The broker has said because she knows about it she needs to disclose it, but we were debating waiting a month (or 3, depending on specific requirements) and then seeing another broker as it wouldn’t then be visible on anything. We weren’t sure if it would even qualify as a DMP as it was one debt that was being paid in full.
She has said some lenders have different criteria and a DMP won’t affect an application; however we had seen a different broker back in January who didn’t ask about the payment on our bank statement when completing an AIP, she had asked about IVA, CCJ and bankruptcy which were all no, and as this was so old it didn’t even cross my mind as being anything like that so didn’t mention it. Now our offer from Nationwide has been drastically reduced despite broker 2 disclosing within the application because the original AIP had differing information. She doesn’t think there is anything we can do to appeal or correct what was simply an error with the original broker.
Richard says
I applied for further advance to a lender but there was an error in my information provided. The further advance was approved but due to that mistake, I informed them that I no longer need the further advance. Hence, it was cancelled. How long should I wait before that record is taken of from stored information. Is it six months or a year. My mortgage advisor suggested I wait for a year. What should I do. Thank you.
Sara (Debt Camel) says
I don’t know what exactly has been recorded. Your mortgage broker is in the best position to advise you.
Jamie says
Do you think this is the reason NatWest ask the question; “have you ever entered into a repayment plan with a creditor”, to try and find out if people have debts that are no longer on their credit reports?
Sara (Debt Camel) says
I don’t know… always go through a broker, never apply direct. The broker can tell you what matters and what doesn’t
Steve c says
Could I ask a question please?
In 2024 me and the wife will be applying for a mortgage but was hoping to take advantage of a 1st time buyer deal, however……..
some years ago around 1996 me and the 1ST wife had a mortgage which we defaulted when we split. I was paying it off and settled my half via a collections agency well over 20 years ago. it was with Abbey National which has long gone.
will this still show up?
Many thanks in advance
Steve
Sara (Debt Camel) says
What sort of first time buyer deal?
Steve says
Hi Sara. A government back one where you can pay 70% of the value as a 1st time buyer then can only sell to a 1st time buyer for 70% if any future selling price.
Sara (Debt Camel) says
It is never a good idea to commit fraud. I have no idea how long HMRC retains tax records for as in 1996 you may well have been eligible for MIRAS tax relief.
Lea says
Hi. My partner and I are hoping to get a mortgage later this year however 8 years ago I had a ca repossessed, this is no longer on my credit file will this stop me from getting a mortgage?
Thanks
Sara (Debt Camel) says
have you been making any payments to a debt collector about the car?
Lea says
Hi,
I have been making a small payment to a collection agency, but these payments have been made by my parents as they took control and I just pay an amount to them each month.
Sara (Debt Camel) says
I suggest you need to talk to a mortgage broker about this.
Jill says
I did the exact same thing, my mother has it coming out of her account and I pay her the money. I waited till it was off my credit report by a few months and then applied. Just told the broker to avoid the lender who it was with (Barclays) broker got my a mortgage offer from nationwide within 2 weeks and completed last month! I think too many scary stories are online, as long as nothing shows on your bank statements and you no longer have anything on the credit report you’ll be fine, grey area around declaring as technically you don’t have it as a financial commitment, your parents do. But will you really be bothered about a grey area when you’re sat in your new house?
Sara (Debt Camel) says
Legally you still owe that debt, whoever is paying it. My advice is to tell a broker the situation.
Jill says
Yes that’s what I said, told the broker to avoid the lender whom the debt was with.
Sara (Debt Camel) says
My suggestion is to tell the broker the full situation, not just which lenders to avoid.
Rich W says
Hi I’m really struggling to get a mortgage, I had my old house repossessed approx 10 years ago, I finished paying an Iva in 2018. Our mortgage broker said These are the reasons I’ve been given for refusal. I’m trying to buy through right to buy from council, we have a big reduction as we have lived here 35 years. The mortgage required is 60,000 I earn between 55-60k a year. It’s so frustrating, now we are being asked for 15% deposit? This all seems very unfair any advice would be welcome.
Sara (Debt Camel) says
what problems currently show on your credit record?
How much other debt do you have at the moment?
how much is the rent at the moment?
Rich w says
There are no problems at all on credit score, I have roughly 4k loan and 7k car finance, that’s about it, the only reason I got rejected apparently was the repossession and Iva
The rent is £430 a month
It will drop to £380 a month with mortgage
Sara (Debt Camel) says
well there is a fairly restricted number of lenders that lend Right To Buy mortgages. Was this lender involved in your IVA? Or the previous mortgage?
On your income it should be pretty quick to save up a larger deposit?
Rich w says
No lenders were involved in Iva
I was just wondering if 10 years since repossession and 6 years after Iva is a reason to reject mortgage? I feel like a criminal ☹️
Sara (Debt Camel) says
A lender doesn’t have to give you a mortgage. Saving up a deposit and clearing the loan seems like the easy way to proceed.
koo says
I have ajust applied for a mortgage and recived an offer and am going through remortgage process. I did have a CCJ back in 2007 that was paid each month as stipulated by the CCJ. The lender-Northern Rock were not good at apportioning this repayment correctly for some customers and I could have been affected. I had unsecured and secured ‘together mortgage’ with them. The CCJ was for 2 months arreas because they rejected my payment offer anyway…I paid each month and no issues were reported as far as I recall with them. I requested a redemption statement for the usnbecured debt and paid it off in full in 2020. My solicitor requested my Deeds and found an Interim Charging Order from 2009?! I had no knowledge of this!!! Surely this should have been removed in 2020 when the debt which I assume it relates to was paid?.. Landmark state the only amount outstanding is my mortgage amount, which is what I am borrowing. What can I do as i dont believe they even had grounds to go for an ICO as i was never late with a payment? I have never seen any court documents, or what was presented to the courts? Can this jeopordise my current mortgage offer? Landmark conformed after redemoption of the mortgage it will be removed from the Deeds/Land Registry…..I am really angry about this .
Sara (Debt Camel) says
so Landmark got the charging order? and they also have the mortgage? But Landmark say say the CCJ has been cleared?
Are you applying for a mortgage through a broker?
koo says
Northern Rock apparently applied for the ICO. Landmark have made no comment. No additional court charges or anything on redemption statements. Landmark know the CCJ was cleared, or at leats should do as the unsecured account no longer exists. Yes, Mortgage through a broker, and have the Mortgage Offer, and now redemption figure, but Solicitor requesting docs relating to theICO and Deeds. I really dont belieev that Northern Rock had any legal grounds for the ICO in 2009. I have pout in a SAR with them….
Sara (Debt Camel) says
Tell your broker exactly what is happening. If the debt has been cleared you may be ok.
Also talk to National Debtline on 0808 808 4000 about your options. It’s going to be hard and not quick to try to challenge anything that happens so long ago.
koo says
All I want is teh ICO off the Deeds, as the debt has been fully repaid, but they are refusing saying ‘they can’t’….Step change. CAB. local Housing Law Centre , and National Debt line wont help….its too niche.
Sara (Debt Camel) says
I’m sorry about that. What does your solicitor suggest?
Barry says
if they say they don’t accept defaults is it black and white?
Are there any occasions where a default maybe overlooked by the human element of a mortgage approval?
For context lender says they will not accept default within 3 years I had a default 8 months ago whilst I was undergoing treatment for bladder and prostate cancer.
Sara (Debt Camel) says
I think you need to talk to barker about this. Factors may include when the default was repaid (the longer ago the better) and how large your deposit is.
Pam says
Hi
My husband and I have reserved a new build property.
I’m getting conflicting info from mortgage advisors.
My husband is squeaky clean
I however took an IVA in August 2017 so it falls off my file next month along with a default that has no payments outstanding.
I have 2 CCJ’s that were included in the IVA but as they were registered before the IVA was issued they still show on my file and they drop off in two weeks.
I have one mortgage broker telling me to apply with the IVA and default still showing as it won’t make much of a difference at this point and trying to rail road me into a near prime mortgage.
I have another telling me to wait until my file is completely clear next month. I do actively monitor my credit file so will be making sure these are removed promptly.
Do you think I should wait, will it make a difference to a potential DIP from lenders?
Sara (Debt Camel) says
what is the downside to waiting?
Pam says
The developer want to complete in 6 weeks but can extend past that if needed – so none really.
I wanted to wait but feel this advisor is rail roading me to one lender. The lender he’s suggesting wants 20% deposit which we can do but leaves us nothing to decorate etc. so would prefer a slightly lower LTV if we can.
I was just looking for some reassurance really that waiting could possibly make a difference.
Sara (Debt Camel) says
Well I am not a mortgage broker – but you should not feel railroaded.
I would have thought it sounds likely that you will have a bigger choice of lenders by waiting.
HJL says
Hi Sara I took out a Tesco unsecured loan in March 2017 & missed the first two payments in July and August 2017. I then paid & caught up with payments in September 2017. After that, my credit file shows consecutive missed payment markers from October 2017 until January 2018. I might have made payments during that time but my file shows missed payments 4 months in a row. I then had a arrangement to pay from Februay to September 2018 marked on my credit file. Then I paid on time and The loan was paid in full in 2021. The AP is still on my file & will be until 2027. Is there any way I could ask tesco to apply a default instead. Would the default apply from October 2017? If this will be possible then would the default not be visible to lenders after October 2023? Do mortgage providers only see defaults within the past 6 years or can they see them if they are older than 6 years? I am worried there will be an application question asking if i have EVER defaulted & not if I have defaulted in the past 6 years. Am I best to speak to a financial advisor to help contact tesco to get the AP changed to a default? I’m worried I ask and don’t do it properly so would be happy paying expert if it gave me a better chance.
Sara (Debt Camel) says
I might have made payments during that time
Don’t you know? Look at your bank statements. Your situation is very different if you didn’t make payments then.
A financial adviser is unlikely to be able to help you sort this out.
Sara says
Hi
I am having a meeting with my Mortgage adviser in next week.We have already granted AIP.But not sure about the Mortgage offer.Since I have a 7 years old debts, which are not in my creadity history (files), but I have setup in direct debits to pay them, so it can see my bank statements.during last 5 years I was not in this country and came back 2022, and started to pay the debts by setting the direct debits.Is that a problem for me to approve the mortgage offer
Sara (Debt Camel) says
I suggest you talk to your mortgage adviser – they should know if this will be a problem for the lender you are applying to.
Olivia says
Hi Sara
I am wondering if I need to ask this question to a mortgage broker, so do let me know if that’s the case
We are looking to remortgage in the next 1-3 years, our current lender is a specialist lender as we are currently in a DMP but we don’t want to stay with them as the rates are not good. We also have some newer credit card debt not in the DMP. The debts in the DMP are all defaulted and will begin dropping off our credit files this summer and will all be gone by February 2026. However the fact we are in a DMP makes us ineligible for most mainstream mortgages. From now we have some extra surplus income and will have some more in a few months when our car is paid off. My question really is whether we should be focussing our efforts on the credit card debt, which is accruing interest but is a much lower overall balance than the DMP, or whether we should be throwing everything we can at the DMP and making settlement offers etc. and secondly, does a DMP to a lender (for example a mortgage lender saying they don’t accept customers in a DMP) mean a formal DMP or would they count making payments toward a defaulted debt (even if no longer on your credit file) as a DMP? I.e would it be any benefit to start paying our creditors ourselves rather than through stepchange once they have dropped off?
Thanks
Sara (Debt Camel) says
would it be any benefit to start paying our creditors ourselves rather than through stepchange once they have dropped off?
No. Debts dropping off your credit record doesn’t help that much with a mortgage application as the lender will see the payments to Stepchange. And if you start paying the DMP debts yourself instead the lender will see the payments to the creditors on your bank statements. Lenders don’t care whether there is a formal DMP or payment arrangements – they don’t like defaulted debts that you haven’t cleared.
We also have some newer credit card debt not in the DMP.
That is bad news – have your DMP payments been too high? Why have you had to borrow more, probably at expensive rates?
You need to get the DMP debts settled, preferably with settlement offers. But you can’t let your other borrowing go up and you have to be paying more than the minimums to the credit cards.
When does your current mortgage fix end?
Can you list the debts in your DMP:
Current creditor, original lender, what type of debt 9overdraft, loan, card etc), current balance, defaulted or in a payment arrangement
Because two options for improving your situation are to ask for the Consumer Credit Act agreement or make affordability complaints. Seeing the list of debts and i can make a guess at which to try first with each.
Olivia says
Hi Sara
We had a personal emergency which we didn’t have emergency funds to cover- the allowance for saving while in a DMP is very small. We are currently paying more than the minimum and have frozen the accounts, I have won two affordability complaints and have another ongoing for the current debts.
Mortgage fix ends in 3 years, we would like to put ourselves in a good position to move house by the time the mortgage fix ends but ideally earlier.
Debts in the DMP are as below. This is a joint DMP. We are paying £400 per month and will have an additional £400 per month now to put towards debt but in order to make any of the larger lump payments we would need to let that accrue. I will gladly take some advice around order of settlements and amounts.
DMP open since 2019 and at current rate will be paid off in November 2030. They are all defaulted with dates ranging from July 19-Feb 20.
I’ll post the list in another comment as it’s saying it’s too long.
Olivia says
1) PRA group, MBNA credit card, £4250 (made AC, was complicated but ultimately they didnt uphold and for numerous reasons I missed deadline to refer to FOS)
2) PRA group, MBNA credit card, £4200 (as above),
3) PRA group, MBNA credit card, £700 (as above)
4) PRA group, MBNA credit card, £2250 (awaiting outcome of affordability complaint)
5)PRA group, MBNA credit card, £2000 (awaiting outcome of affordability complaint)
6) PRA group, Barclaycard credit card, £5400
7) PRA group, Barclaycard credit card, £2000
8) Intrum, Tesco credit card, £2050
9) Intrum, Tesco credit card, £1300
10) PRA group (but being collected by Moorcroft- RBS just informed me it was sold a month or so ago), RBS loan, £2100
11) Next, catalogue, £200
With the exception of the RBS loan, all the PRA accounts were sold fairly quickly after defaulting.
Sara (Debt Camel) says
ok so I would ask the debt collector for the CCA agreement for any debt where an affordability complaint has been rejected or where you don’t intend to make one
See https://debtcamel.co.uk/ask-cca-agreement-for-debt/
Olivia says
Thanks Sara, I will do this. Do you have any suggestion about offering settlements where the CCA agreement route is not successful based on the size/age of the debts? And would it be best to start with the smallest debt and work up given I’d need to save for the lump sum amounts? (snowball method?)
Sara (Debt Camel) says
Why don’t you review the situation in 6 months?