Debt Questions

Hi,

I have a defaulted loan agreement on my credit report that I defaulted on in Oct 2006. I am paying it back in such small amounts that it will take 20 years to repay at the current rate.

In actual fact my finances have improved and rather than increase my repayments I am busy saving up to make a F&F settlement. This is going to take me a couple of years though.

So my question is this:

- In Oct 2012 will my defaulted account disappear from my credit report completely, or if I owe money will that still show? Will it show as a normal credit account, not a defaulted one?

- Would my CRF be better off in the long run if I made my F&F settlement before the default disappeared or after? Could clearing the default early somehow prolong the length of time this account appears on my file?

Cheers,
UHS

I think clearing it before via a full and final settlement will mean that the settlement will sit there for six years? But I am not an expert on creidt reports so please can anyone else help?

I guess this would be exactly the same as when an IVA is completed early via an F&F (I don't suppose it matters how the F&F was instigated)...

In my case, I defaulted on all my accounts in Nov 05, when my IVA started. One year later, I successfully completed my IVA via an F&F.

My CRFs show my IVA completion and that my accounts defaulted in Nov 05. But now each account is shown as "settled" or "partially settled" (depending on how the creditor words this aspect) and the balance for each one is zero (even though, of course, through the F&F they only received a fraction (27% in my case) of the full debt.)

This information will show on my files for 6 years from Nov 05 (ending next year, hooray!)

One thing to check on your CRFs is that your account is shown in default and at the correct date, so it doesn't go on past the 6 year timescale.

Am quite sure it's 6 years from the point the F&F is accepted and paid.

I asked Credit Expert (Experian) yesterday, as I had to talk to them about something else (I pay the monthly fee as a "member", so have a telephone help line - quite useful when going through the "post-debt CRF clear up phase"!).

They confirmed that defaulted accounts will disappear from a CRF after 6 years from the default, regardless of whether they are settled or unpaid (and therefore regardless of what the balance is). They said that paying it does not "reset" the clock in any way. As far as they knew, the other CRAs operate in the same way.

Once more (as often said on this forum) they stressed the need to ensure that default dates are correctly shown on our credit files, otherwise they won't disappear as expected.

Thank you for clearing that up.

So we now know officially that it is six years from the date of default that it falls off. Really that should have been obvious to me, but it wasn't - basically I should know as this is also true of CCJs whether they have been paid in full or not as that is what happened to me!

I don't check my credit report - no need for further credit at the moment. Desire but no need.

Yes, quite right. I forgot to say about CCJ's (didn't have any) but they mentioned them too... as you say, CCJ's go from your report in the same way, 6 years after "creation".

I'll stop checking my CRFs very soon; I haven't been doing it with any idea of ever (ever ever! ) getting credit again (did I say ever? ), but I'm just making sure that all accounts are showing default dates/zero balances correctly and will disappear at the right time. I've only got one comment box to get rid of (which I instigated, Doh!) and I'm done. Hooray!

It just gives me piece of mind that no low-life opportunist DCA will be able to come chasing for something that has really been cleared up years ago in my completed IVA.

(I must say that it's quite a pleasure dealing with Experian and Equifax on their (UK based, of course) help lines - makes some other companies helplines sound truly dreadful!)

Thanks very much for the answers folks!

Interestingly though, on MSE's credit report articleit says:

Some defaults or missed payments.

Usually, these stay on your file for six years, so anything before that may be wiped off. However, if you close an account, then missed payments could remain on your file until the sixth anniversary of account closure. With bankruptcy, it is wiped six years from the date you're declared bankrupt, as long as you're been discharged from the bankruptcy.


Now unfortunately this doesn't mention defaults - I hope that what submariner was told is correct in that case.

Hi; yes, the important thing is make sure that the account is defaulted with a date on your file. (Your original post on this thread mentioned default, so presumably yours is "logged" and showing on your file?). I know that doesn't sound good, but the default actually provides an important date to start the "clearing up" clock ticking for 6 years.

In my case, my defaults and IVA occurred almost simultaneously. Often, I guess, they would occur before the IVA (or BK) was granted. In that case, accounts would drop off CRFs after 6 years, but the notice about IVA ( or BK ) would carry on until their own 6 year anniversary.

It's an interesting point about accounts that just show some missing payments and then carry on properly afterwards. Presumably those bad payments could show on a CRF for considerably longer than 6 years, depending on the payment plan/history.

Didn't ask that question of Experian, of course...