Defaulted Account on Credit File Quick Question

[Secretjay]

Hi,

 

I have a couple of defaulted accounts from Jan 2006.

 

From what I've read a Default drops off your Credit File after 6 years.

 

One account has offered me a full & final settlement so if I accept I'm just wondering will the default still drop off my account in Jan 2012 or will it be from when this last f&f payment is made?

 

Also my other account has a larger balance which I don't think will be paid off by Jan 2012 so will the Default still drop off my file even though I will still have a balance on it?

 

I sometimes read too much I confuse myself.

 

Many thanks.

[dundeelaw]

Defaults will remain on your credit file for 6 years from the date of default or date of settlement.

 

If you decide to settle, the default will change to settled on your Credit File but it will remain for a further 6 years from that date.

 

If you do not setlle, the Default will drop off your Credit File in Jan 2012, even if you have a balance owing. Your Credit File will still show the outstanding amount for that account until it its paid off and closed but the default will be gone.

[Secretjay]

Thanks dundeelaw for clearing that up for me.

 

I was thinking when the Default dropped off the Credit file then the whole account would disappear - wishful thinking I suppose. I understand now that the balance will still be there, just no Default.

 

Just wondering now how the OC/DCA's will mark my Credit File when the Default drops off if I'm only paying reduced payments.

 

Thanks.

[dundeelaw]

If you are paying reduced payments, they will probably mark your Credit File as "AP" Arrangement to Pay or they will place a "Special Instruction Indicator" on your Credit File which will note something like in a Debt Management Plan or something along those lines. Each Creditor is different and the wording will be different at the different Credit Reference Agencies.

[IdaInFife]

also you can request as a part of any full and final that any adverse data is removed from your credit file

[Secretjay]

Thanks guys for the info,

much appreciated.

[craigers]

i have to disagree with dundeelaw. the ico is specific in stating that a default will fall off 6 years from the date the account defaulted regardless of the status of the account at the 6 year point. so if you settle, make an arrangement to pay, or do nothing, it should still drop off in january 2012. this is also my personal experience- credit card defaulted in 2003, settled 2007, default dropped off 2009; personal loan defaulted 2003, settled 2006, default dropped off in 2009.

 

further to this, a settled account will drop off your file after 6 years if the account hasn't been defaulted, ie payments have been maintained in line with the agreement. say you have a credit card but decide the interest rate is too high. if you pay the card off and close the account, then the creditor will show your file as settled. that account will remain on file for 6 years from settlement as a record of your account conduct.

Edited May 12, 2010 by craigers

[Secretjay]

Thanks very much craigers, you've so made my day.

 

I've been reading alot lately on this site & I have come across a fellow cagger whose defaulted accounts disappearred from their Credit file after 6 years even though there was still a balance on them, just as you say.

 

I was thinking my Credit file would be ruined for life, so glad it won't be (although I've no intentions of ever getting credit in the future)

 

Thanks again

Sjay