Credit reports and defaults
Discussion
I have some questions about defaults on credit reports.
I recently obtained a copy of my credit report from Experian, and there are 2 defaults listed.
Both are for the same debt, an unpaid overdraft from a well known building society. The debt came about when I went travelling overseas for 4 years. After around 1.5 years, my debit card was retained by an ATM in Indonesia, whilst the account was £700ish overdrawn (an arranged overdraft). At the same time I was locked out of my internet banking.
Since I had another bank account this didn't present a huge problem, I just used the other account.
When I returned to the UK 2.5 years later, it became clear that this debt had been sold to a debt collection agency. They proceeded to send weekly letters requesting contact and offering to settle the debt at a lower price. I have currently ignored these letters.
Both the original building society and the debt collection agency have registered a default on my credit report, both dated about a week apart and over 4 years old now.
My question is, after the 6 years expires and these defaults are removed, what's to stop the debt collection agency re-registering the default on the report? Presumably they can't do this? I can afford to settle the debt easily, but since these defaults will remain on the report regardless until the 6 years is up, and the original creditor has now written off the debt, I would prefer not to pay any money to this DCA. From my reading of various forums, it seems a CCJ is unlikely from this DCA.
Sorry for the long post. Any advice?
I recently obtained a copy of my credit report from Experian, and there are 2 defaults listed.
Both are for the same debt, an unpaid overdraft from a well known building society. The debt came about when I went travelling overseas for 4 years. After around 1.5 years, my debit card was retained by an ATM in Indonesia, whilst the account was £700ish overdrawn (an arranged overdraft). At the same time I was locked out of my internet banking.
Since I had another bank account this didn't present a huge problem, I just used the other account.
When I returned to the UK 2.5 years later, it became clear that this debt had been sold to a debt collection agency. They proceeded to send weekly letters requesting contact and offering to settle the debt at a lower price. I have currently ignored these letters.
Both the original building society and the debt collection agency have registered a default on my credit report, both dated about a week apart and over 4 years old now.
My question is, after the 6 years expires and these defaults are removed, what's to stop the debt collection agency re-registering the default on the report? Presumably they can't do this? I can afford to settle the debt easily, but since these defaults will remain on the report regardless until the 6 years is up, and the original creditor has now written off the debt, I would prefer not to pay any money to this DCA. From my reading of various forums, it seems a CCJ is unlikely from this DCA.
Sorry for the long post. Any advice?
Simpo Two said:
Seems to me you have the Agency's very generous offer to pay off your £700 debt (money you spent and no doubt enjoyed) for significantly less than £700 - AND get your credit record sorted out. What's not to like?
(call me Rinder!)
Except the whole system does not work like that. Even if he pays the agency, the credit default will remain on file for six years, so another few years.(call me Rinder!)
Even if it is a paid default, it is still such a major negative consequence.
My understanding is that after 6 years, the debt will become statute barred, and the default will also be wiped from the credit report. From what I've read, it sounds like once the six years are up, I will still technically owe the money, but nothing can be put on my credit report about it, and I cannot be taken to court etc.
Some of you have picked up on a moral issue which is fair enough, but repaying the debt now would only be furnishing the profits of a debt collection agency. It would not go to the original creditor as the debt has been sold and settled from their perspective.
Even if I repay the full amount now, the default will remain on file until the 6 years is up. So is there any advantage or reason why I should settle with the DCA?
Some of you have picked up on a moral issue which is fair enough, but repaying the debt now would only be furnishing the profits of a debt collection agency. It would not go to the original creditor as the debt has been sold and settled from their perspective.
Even if I repay the full amount now, the default will remain on file until the 6 years is up. So is there any advantage or reason why I should settle with the DCA?
R8Steve said:
Just because the default will be removed you will still show as having an outstanding balance due.
It will just show as, for example -
DCA - £700 666666666666666
instead of
DCA - £700 DDDDDDDDDDDDDDD
Incorrect.It will just show as, for example -
DCA - £700 666666666666666
instead of
DCA - £700 DDDDDDDDDDDDDDD
The whole record is remove from the CRA's database 6 years after the recorded default date.
witko999 said:
My understanding is that after 6 years, the debt will become statute barred, and the default will also be wiped from the credit report. From what I've read, it sounds like once the six years are up, I will still technically owe the money, but nothing can be put on my credit report about it, and I cannot be taken to court etc.
Although the credit record and statute barring both operate a 6 year rule, the latter will be reset if you acknowledge the debt within the 6 years.PurpleMoonlight said:
Although the credit record and statute barring both operate a 6 year rule, the latter will be reset if you acknowledge the debt within the 6 years.
Yes I have read that. That's why I have been ignoring all contact up to now.So it seems that unless the DCA push for a CCJ, there would be no advantage to me (in a purely selfish sense) of paying back the debt. Either way my credit report will be poor until the defaults are removed.
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