Default on my credit report - what to do about it?

[zed4]

Hi,

I recently bought the Tesco Finest Home Insurance, and with it came free membership to Protect My ID. So I signed up and ran a credit check.

Everything seems to be in order, no late payments on my mortgage, previous loan, credit card, phone or house utilities, except for one thing. A default from a debt collection agency. Years ago my ex girlfriend and I were living together. She had a terrible credit rating and couldn't get the phone contract she wanted, so I took the contract out in my name and she provided her bank details for the Direct Debit.

Fast forward a year or so and we split up. Of course, I thought nothing of the phone contract but she quit her job and moved back to her parents, about 100 miles away. I guess she either ran out of money, or lost the phone, or just didn't pay the bill to spite me, but whatever the reason, she stopped paying the bill.

The first I knew about it was a letter from a debt collection agency much later at my new address. It must have taken them a while to track me down to my new address and by that time the debt was £113. Something like a month's line rental plus admin fees. I duly paid the bill, thought lesson learnt and forgot about it. It wasn't a huge amount of money.

But now I see that my credit report has a default dated April 2010 for £113. It says:

"The account is in 'default'. You failed to keep to your credit agreement and have not responded satisfactorily to requests to bring your payments up to date, so the credit agreement has ended."

Started: 22/12/2006
Current Balance: Satisfied
Default Date: 05/05/2009
Default Balance: £113

The company is: LOWELL PORTFOLIO 1 Ltd

So, is there anything I can do? When I got the letter from the debt collector, I paid it and thought that was the end of it. Or shall I just leave it and assume it will be removed in April 2016?

Thanks,

Dan (with an otherwise perfect credit rating!)

[zed4]

Actually, thought I'd give Protect My ID a call, seeing as they're the experts!

They said there's nothing they can do until the 6 years is up. Although I can speak to the Financial Ombudsman if I want to try and get it removed. Probably not much point, is there?

My only concern is whether a mortgage company might be put off when we come to remortgage in a year's time.

[Sarnie]

You can't get it removed, it's a legitimate defaulted account.

It potentially will affect your remortgaging ability as it's adverse credit.

[Gulzar]

Sounds pathetic and unfair but it does seem like it will be very difficult to get removed.

The best thing you can do (and this will work - not from my but other peoples experiences) is fully document the incident - when the contract was taken out, her direct debit details, include proof and copies showing her name on direct debit, time of your relationship etc and movement of home and document why and how this came about. When you apply for a mortgage, advise them fully of this incident before hand and provide them all documents - that way it wont come up as a shock that it was declared and hang on whats this? red lights! etc... they are reasonable and you'll find you will have hardly any trouble getting a mortgage if you go about it this way,

good luck to you,



p.s. also keep a photocopy of the first baliff note showing you owe approx £100 in arrears and clip a copy of your bank statement of that day and the weeks before - hopefully ten times sufficient to pay this small debt to proove ignorance and lack of communication regards the debt.

Edited by Gulzar on Monday 16th December 11:06

[mrmr96]

Gulzar said:

The best thing you can do (and this will work - not from my but other peoples experiences) is fully document the incident - when the contract was taken out, her direct debit details, include proof and copies showing her name on direct debit, time of your relationship etc and movement of home and document why and how this came about.

I don't see how that should help? If the credit agreement is in HIS name then HE'S the one guaranteeing it. He put his name on it, so it's his responsibility, regardless of what SHE did. In fact, I'm not sure how smart it would be to 'fess up to obtaining credit in this way, particularly if you then try to use the excuse that "it's not really your account" when you're the one who's been rated for it, AND it's then "gone wrong" (i.e. not been paid).

I think the OP just need to chalk this one up to experience TBH, and not obtain credit for other people in his name.

[Sarnie]

mrmr96 said:

I don't see how that should help? If the credit agreement is in HIS name then HE'S the one guaranteeing it. He put his name on it, so it's his responsibility, regardless of what SHE did. In fact, I'm not sure how smart it would be to 'fess up to obtaining credit in this way, particularly if you then try to use the excuse that "it's not really your account" when you're the one who's been rated for it, AND it's then "gone wrong" (i.e. not been paid).

I think the OP just need to chalk this one up to experience TBH, and not obtain credit for other people in his name.

+1

From experience, every default has a 'story'. Lenders don't care about stories. Lending decisions are automated processes with the vast majority of lenders and the presence of this default is going to lower the OP's score.

[mcflurry]

I would imagine some lenders will look at it as a stand alone £100 mobile phone default, and others as though you stepped in something unpleasant. When it comes to mortgage time, a decent broker should be able to tell you which is which

[pacoryan]

Given that the default is four years old already I wouldn't lose sleep over it, just keep your nose squeaky clean. You might get uphill from a mortgage lender but the intervening four years will help your score, assuming you have other credit and it is well serviced.

[Sarnie]

mcflurry said:

I would imagine some lenders will look at it as a stand alone £100 mobile phone default, and others as though you stepped in something unpleasant. When it comes to mortgage time, a decent broker should be able to tell you which is which

Some lenders specifically ignore mobile phone defaults, some will ignore defaults over three years old and some will ignore any that are under £100. The difficulty is knowing this in advance, which a decent broker should be able to sort out for you.

[zed4]

Thanks everyone, all very helpful and reassuring.