Credit File - Default: When is it removed?

[Sarnie]

I have a client with a default registered in 2010. Credit file reports it for six years.

But, after the default he made consistent payments to the account, shown on the credit file, and the debt was satisified in 2013.

So, my assumption as normal was that the default drops off your credit file after six years. But the continued payments to the account show until 2013.

So, if the default drops off after six years: does the payment history for the following three years?

I've seen plenty of cases where the defaults disappears after six years but all of them had no account activity after the default date so they just disappeared.

Basically I'm trying to work out if he can look to buy a property in 2016 or 2019!

Any credit experts about?

[Mojooo]

I dunno the answer - but your view is what I though - the default goes after 6 years but the remaining payments will show.

[Sarnie]

Mojooo said:

I dunno the answer - but your view is what I though - the default goes after 6 years but the remaining payments will show.

Yeah, my understanding is that once the registered date of the default passes then the credit agencies will effectively stop reporting the default which in theory should mean that his credit report becomes 'clean' again.

However, for three years after this date he's made payments to the account, eg taking responsibility for the debt, and got to the point of paying it off entirely. But, for each months payments instead of the usual 1-6 numbers to show how up to date the account is it says 'D' for 36 months until 2013 when it reverts to 'S' for satisfied. My concern is that the 36 'D's are going to be reported as defaults effectively punishing him for making payments to the account until 2013.....

[P-Jay]

Perhaps my memory is failing me but as I remember from when I was an underwriter - all agreements drop off after 6 years of the start date, unless there's a default notice when it drops off after 6 years after that, even if the original agreement was longer than 6 years.

[PurpleMoonlight]

I have been in this situation.

The whole record will be automatically removed after 6 years from default date.

Once a default is recorded any subsequent payments are towards a defaulted debt. It doesn't matter if that debt is repaid or outstanding at the end of the 6 years.