Remove Defaults from your Credit Report

Remove Defaults from your Credit Report

Do not pass Go!

It's important to set some expectations right up front. If you have a default or a CCJ on your credit report, and it is legitimate (i.e. you didn't pay something) then you can't simply take it off. It will affect your credit score which will make getting new credit harder, and more expensive. Some companies claim that they can even get these removed - They cannot. If you do have a legitimate default, it is even more important that you get the basics sorted, otherwise your credit score will be utterly worthless.

How to deal defaults properly

First, get access to your free credit report trial and see if there are defaults, arrears or surprises. Then get yourself on the electoral roll, and start paying down debt like your life depended on it. Finally, work through any linked addresses or persons on your credit report, and make sure that they are all legit. If not, message the bureau and get them removed or corrected immediately. You cannot afford to have defaults on file and have basic stuff wrong as well! Don't muck about, get it done.

Alarm bells ringing...

A lender must inform you that you are in arrears, with a warning letter 28 days before a default notice is sent to you. This is your best opportunity to avoid the default notice. If you get a warning letter like this, call the lender up straight away and arrange a way to proceed. Be honest about your current situation, and commit to something you can realistically manage to pay off the debt. The lender will bend over backwards to accomodate, as this is the only way they get all of their money back. Most importantly- be proactive here and save yourself a ton of grief.

How long do defaults stay on your credit history? Six years!

A default notice will outline the action to be taken to resolve the outstanding amount; you will have just 7 days from receiving the default notice, to action it. "Action" here means communication at the least. If you can pay off the full amount, do it. If you can't, then you have to give them a call to agree a way to pay it off- perhaps in smaller increments. If you're worried and stil unsure, go speak to the citizens advice bureau who can advise you. But remember- time is very short at this stage. Do it straight away. If you ignore this, you will be taken to court, and this then turns into a County Court Judgement (CCJ).

Once a default notice is sent, this will then stay on your Credit Report for six years. Yes that’s right- years

Smart strategies for default notice removal

If you have just received the default notice, there are some ways you can potentially work with the lender to try to get the default removed, as follows:

Angle A: For small defaults, appeal to sympathy

If the default is under £500, write them a letter designed to invoke their sympathy is suggested. Write with persistence to the lender, along the lines of the 'amount owing is small', or 'we moved house so didn’t get the warning letter' (if true), maybe even 'we have tightened up our financial situation'. Simply put a human letter explaining your situation, to try to get some grace extended to you.

Angle B: Make sure the lender has followed due process

If the default is more than £500, one angle is suggesting to the lender that they did not follow the legal procedure. They must send you a warning letter 28 days, before sending the Default Notice, if they did not, then there may be scope to have the default removed. Write to the lender, and ask for evidence that they sent this warning letter to you. Send all of your letters, recorded delivery and keep the records. Repeatedly ask to see the original copy of the warning letters with proof of postage.

Defaults related to redundancy or unemployment

Unfortunately there is no way a CCJ or Default can be removed simply because you lost your job. You can add a ‘notice of correction’ to explain the reasons behind a default on key sections of your credit report, which is 200 words, Lenders have to read this. But the best course of action if you do loose your job is to speak with your current lenders staight away to discuss your situation.

The thing with defaults, just like CCJ's is that you get fair warning of them. Do everything possible to avoid them as they will cause you credit head-aches for a almost a decade. Obviously pay the bill first and foremost. If you move house make sure you give all of your accounts your new residential address. Also support this by setting up a postal redirect for at least 6 months, to ensure stray bills make their way to you. Don't leave these things to chance or they'll come back to bite you.

Got a question about defaults? Leave a comment below or ask a question in our forum by registering now.

3 Responses to "Remove Defaults from your Credit Report"

  1. Why

    2013 02 16

    Interesting read!

    So as stated: “Even once the debt has been satisfied, it still remains on your credit report for six years”

    What is the point in paying then?

    Aktiv Kapital’s latest ‘offer’ to me is pay £912.48 and they’ll pay £3649.90 or their usual action, “we’ll get our agents to knock your door and ring your hse phone” will continue (This action has been going on for years and I’ve never answered the door, telephone (callerID is wonderful) or their repetitive letters)

    Now even if their offer was ‘you pay £2.48 and we pay £4559.90’, I still wouldn’t pay as any payment (mine or theirs) does not remove the default info, so why do debtors bother ask for any payment? [scratches head]

  2. Luke

    2013 02 24

    This is the argument I have too, I have got into a lot of debt over the past 3 years and I have now slowly gone through all lenders and sorted them out, I believe that if you have a default on your file but it is paid off, it will come up saying satisfactory default which increases your score, I do not know how much by but it basically shows lenders that yes you got behind but you was able to pay it off in the end, but I would suggest not paying off your defaults if they are say 5 years old because you only have to wait a year, if you contact them now (even if your contacting to clear debt) the 6 years will start again

  3. alex

    2013 03 05

    I would like everyone to know and that includes you luke , never ever pay ,what your saying about satisfied helping your credit score and how people see it is so so wrong, it isnt a person who looks at your file it is done by a computer, it is always seen by the computer as a default, please listen.

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