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Default notices and how to remove them

Sunday, 26th September 2010

103-info-questionsHow to remove Default Notices is further down this page

What is a default notice?

A default notice is something that a lender puts on your credit file if you fall behind with your payments.

When you borrow money from any financial institution you usually sign an agreement, in the terms and conditions of this agreement you give permission that should you fall behind with your payments then the financial institution can inform the credit reference agency of this, hence the default notice.

Also, before a debt can be sold on, the lender has to demonstrate that that they have tried to contact you and keep the payments going, once you have two default notices against you then the debt can be sold on.

The default notice has nothing to do with a county court; it merely alerts future lenders that you have not kept up with the payments.

Information sheets on arrears and Default notices

Lenders must include a copy of the relevant information sheet when they send a consumer a notice that they are in arrears or default. This is required by the Consumer Credit Act 1974 (section 86A). These sheets are intended to help consumers by giving them information about their rights and responsibilities and where to go for help.

They are available in English and Welsh and can be printed in colour or mono. See Welsh version FCA Authorisation Sheets (Welsh)

Information Sheets

Lenders must use the information sheets below rather than any previously provided by the OFT.

Arrears, effective from 1 April 2014

Default, effective from 1 April 2014

High-cost short-term loans, effective from 1 July 2014

High-cost short-term loans peer-to-peer lenders (P2P), effective from 1 July 2014

How to remove the default notice

There are several ways you can have a default notice removed, you will have to be patient and persistent but it is worth a try. To have them stay on your credit file will cause problems getting future credit.

The first step is to identify the financial institution (lender) that placed the default on your file; you may already know this, if not then do a credit search on yourself to see which one it is. See your credit report for free

If any of the below apply then you have a chance, you should write to the lender that placed the default notice asking if they would consider removing the default notice.

  1. The loan has now been repaid in full
  2. You have come to a new arrangement to repay the loan
  3. The payments are now up to date and you are no longer in default
  4. You can demonstrate that the default was placed incorrectly on your credit file.

If they agree to your request then ask them to confirm this in writing on their letterhead.

Some lenders may charge a small administration fee for the additional work.

If the lender agrees to your request then send a copy of their letter confirming such to one of the credit reference agencies asking them to remove the default notice from your file.

Where can I get free debt help / advice and debt solutions with no fees?

You can either telephone DebtWizard on 0800 783 4582 (Mon to Fri 8.45am - 7pm) or click on the following link to get details of other free debt advice organisations, including debt charities.

Take me to free debt advice agencies.

 

 

 

 

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