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Can settled account have negative effect on credit file?

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13 posts • Page 1 of 21, 2

Can settled account have negative effect on credit file?

Postby chippy1 » March 25th, 2017, 2:50 pm

Hi Mike,

Please can you help. I've just had a default marker removed from an old mortgage account that had a shortfall that was settled in bankruptcy.

The default and all missed payments leading up to it, have been removed as bankruptcy was nearly 7 years ago but Lender has not backdated the "settlement date" from the date the house was sold.

When looking at my credit file, the payment history on this account is now just showing as up-to-date with a full settlement date. So doesn't seem to have any negative impact on my credit file, as just looks like an old/closed/settled account.

Under legislation when a debt is bankruptcy debt the default date should be set at the bankruptcy order date and settled on discharge but as property was sold after discharge, the Lender has backdated the default (to the bankruptcy) but not the settlement date to the discharge.

I just needed to check whether I still need to push to get the settlement date changed or now that the default has been removed, could an old/closed/settled/up-to-date account, actually help your credit rating? If its seen as a positive, will not try to get the settlement date changed and just let it fall off automatically....

Many thanks for any help
chippy1
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Re: Can settled account have negative effect on credit file?

Postby Debtwizard » March 27th, 2017, 9:20 am

Hello Chippy7 and welcome back to the forum.

As mentioned in my pm with you I will ask James Jones from Experian for his comments. He is back in the office today so I will give him the nod tomorrow as I suspect he already has a full day.

There is a chance it wouldn't have impacted on your credit file but let's see what the expert thinks. It does seem to me you are being given the round around by the previous lender, is this something you would consider going back to the Financial Ombudsman Service (FOS) about?

Best wishes,
Mike
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Re: Can settled account have negative effect on credit file?

Postby chippy1 » March 27th, 2017, 10:38 am

Debtwizard wrote:Hello Chippy7 and welcome back to the forum.

As mentioned in my pm with you I will ask James Jones from Experian for his comments. He is back in the office today so I will give him the nod tomorrow as I suspect he already has a full day.

There is a chance it wouldn't have impacted on your credit file but let's see what the expert thinks. It does seem to me you are being given the round around by the previous lender, is this something you would consider going back to the Financial Ombudsman Service (FOS) about?

Best wishes,
Mike


Hi Mike,

Many thanks...appreciate you speaking to James for me. I'm really hoping, as the account is now up-to-date/closed with a full settlement date, that it is seen as a positive and then I can just let it automatically drop off the credit file after its been closed for 6 years but I am willing to go back to the FOS if needed....It's been a long fight, so hoping I dont have to re-open the complaint case and start again....

Thank you again
chippy1
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Re: Can settled account have negative effect on credit file?

Postby AskJames » March 27th, 2017, 11:37 am

Hi Chippy7

A settled account with a perfect repayment record is likely to help strengthen your credit history and therefore improve your credit score, so I would not be concerned about the settlement date.

You can get free guide credit scores these days from all three credit reference agencies (Experian - from our website, Callcredit - via Noddle, and Equifax via Clearscore and these are a great way to monitor the health of your three credit reports.

Kind regards
James
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Re: Can settled account have negative effect on credit file?

Postby chippy1 » March 27th, 2017, 5:03 pm

AskJames wrote:Hi Chippy7

A settled account with a perfect repayment record is likely to help strengthen your credit history and therefore improve your credit score, so I would not be concerned about the settlement date.

You can get free guide credit scores these days from all three credit reference agencies (Experian - from our website, Callcredit - via Noddle, and Equifax via Clearscore) and these are a great way to monitor the health of your three credit reports.

Kind regards
James


Hi James,

Many thanks for your help and quick reply. I appreciate it! I think my only concern, is that you often have to say if you've "ever" had a property repossessed when applying for a mortgage and as I have to say yes, I was concerned it looks a bit strange on my credit report that the mortgage account is in fact recorded as up-to-date, closed and settled with no default recorded.

James, Please could I ask just one more question?

Is it normal to have a repossession shown as up-to-date and settled on a credit file?

It's good to know that a up-to-date/settled account is a positive thing to have on your credit report. As it actually improves your credit report, it would make sense for me to just let it drop off automatically instead of having to re-opening my complaint against the Lender.

Many thanks James/Mike......appreciate your help and support on this website!

Kind regards
chippy1
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Re: Can settled account have negative effect on credit file?

Postby Debtwizard » March 28th, 2017, 10:02 am

Hello Chippy7

Good to read that James Jones has put your mind at rest.

Re your last question 'Is it normal to have a repossession shown as up-to-date and settled on a credit file?'

If it is over six years old then it shouldn't be on your credit file. Credit files do not necessarily record all outstanding debts.

Trust this helps,

Best wishes,

Mike
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Re: Can settled account have negative effect on credit file?

Postby chippy1 » March 28th, 2017, 11:41 am

Debtwizard wrote:Hello Chippy7

Good to tread that James Jones has put your mind at rest.

Re your last question 'Is it normal to have a repossession shown as up-to-date and settled on a credit file?'

If it is over six years old then it shouldn't be on your credit file. Credit files do not necessarily record all outstanding debts.

Trust this helps,

Best wishes,

Mike


Hi Mike,

Thanks again for your replies....

"If it is over six years old then it shouldn't be on your credit file"?

Mike, This is where the grey area is, under bankruptcy legislation the settlement date would be when I was discharged from my bankruptcy and account would drop off almost right away as its almost 6 years since my discharge...Lender has removed the default as it was included in a 7 year old bankruptcy but hasnt corrected settlement date. So I currently have a mortgage account showing on my credit report that was connected to a repossession but is now showing as up-to-date/closed and fully settled.

From James's comments is sounds like the account is good for my credit report now it has been corrected but it still feels like Lender has only done "half" the job by removing default but not correcting the settlement date.

If it doesnt negatively effect my report, it might make sense just letting it drop off 6 years from the current settlement date but if pushing the Lender, to correct the date, would make my report look better, I would do it??

thanks again
chippy1
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Re: Can settled account have negative effect on credit file?

Postby Debtwizard » March 29th, 2017, 7:35 pm

Hello Chippy7

I understand some credit reference agencies stopped holding repossession records a few years ago because all mortgage providers now routinely share monthly payment data. Repossession should coincide with account default.

So it's a difficult call, you have done well so far, that said you now know about the Financial Ombudsman Service (FOS) and The Information Commissioner along with their contact details.

If this still irks you then have a word with both and see if they confirm there is merit in you pushing to have this settlement date removed as well.

Best wishes,

Mike
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Re: Can settled account have negative effect on credit file?

Postby chippy1 » March 29th, 2017, 9:45 pm

Debtwizard wrote:Hello Chippy7

I understand some credit reference agencies stopped holding repossession records a few years ago because all mortgage providers now routinely share monthly payment data. Repossession should coincide with account default.

So it's a difficult call, you have done well so far, that said you now know about the Financial Ombudsman Service (FOS) and The Information Commissioner along with their contact details.

If this still irks you then have a word with both and see if they confirm there is merit in you pushing to have this settlement date removed as well.

Best wishes,

Mike


Hi Mike,

Thanks for your reply. It's a really difficult one to work out. Have spoken to the FOS and they said it might be a good idea to speak with the credit ref agencies, just to see if there is any negative impact from account still showing on credit file. If credit ref agencies felt there might be a negative impact, the FOS would be willing to re look at the case. If not, it would make sense to just let it drop off automatically as default has already been removed.

As James has said it is a positive having the settled account on file, I was thinking, it might be worth just letting it drop off automatically.

As default has been removed, so has any record of missed/late payments...All monthly payment history is now showing as up-to-date(green) and 0 balance when closed/settled...it actually looks like a normal/fully settled account...

I guess the question is:

If no defaults, missed or late payments showing on payment history, is the mortgage account still seen as a repossession on my credit report and can a mortgage account be a repossession and be up-to-date and fully settled both at the same time?

Am I right in thinking that techically...if the default is now 7 years old and payment status has been added to show up-to-date for the full 6 years before account was closed/repossessed, this should no longer be classed as a repossession on my report, even tho the closed account is still showing due to the settlement date that the Lender has recorded?

Sorry for all the questions....
chippy1
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Re: Can settled account have negative effect on credit file?

Postby Debtwizard » March 30th, 2017, 5:12 pm

Hello Chippy1

If no defaults, missed or late payments showing on payment history, is the mortgage account still seen as a repossession on my credit report and can a mortgage account be a repossession and be up-to-date and fully settled both at the same time?

Am I right in thinking that technically...if the default is now 7 years old and payment status has been added to show up-to-date for the full 6 years before account was closed/repossessed, this should no longer be classed as a repossession on my report, even tho the closed account is still showing due to the settlement date that the Lender has recorded?


Re First question, paragraph one - the repossession(repossession default 7 years old) will no longer be shown on your account as it will have dropped off after six years.

RE second question, paragraph two -I do not know the answer for you, I will see if James Jones can help.

Best wishes,

Mike
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