Request a retrospective default or retain payment history?

[Damioni]

Hi all and thanks for reading. I have recently finished a DMP and I am looking for some advice on improving my credit rating with a view to applying for a mortgage, as I finally start toget my finances back on track. My situation is as follows: Thedefaults registered on my account are due to fall off in August of next yearand I am starting to put together a deposit for a mortgage. With this in mind I am trying to do whateverI can to improve my credit rating.I have recently been successful (with the help of the FOS) ingetting a default retrospectively added to an account that was previouslymarked with AR markers for the entire period of the DMP and this will nowdisappear along with the other defaults.
After the defaulted accounts disappear, I only have oneconcern relating to a Lloyds Bank Credit Card. The account was never defaulted, as the payments under the DMP wereclose to the contractual payments. Overtime the payments made through the DMP started to cover the minimum paymentsand Lloyds started recording the account as being up to date (although chargesand interest were frozen after some time).
The records on my Credit file read as follows:

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2015	0	0	0	0
	OK	OK	OK	OK
2014	0	0	0	0	0	0	0	0	0	0	0	0
	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK
2013	0	0	0	0	0	0	0	0	0	0	0	0
	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK
2012	0	0	0	0	0	0	0	0	0	0	0	0
	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK
2011	0	1	1	1	1	1	1	1	1	1	0	0
	OK	AA	AA	AA	AA	AA	AA	AA	AA	AA	OK	OK
2010	0	0	0	0	1	1	1	1	0	0	0	0
	AR	AR	AR	AR	AR	AR	AR	AR	AR	AR	AR	OK
2009					0	0	0	0	1	2	3	0
					OK	OK	OK	OK	AA	AA	BB	AR

Realistically, it will be January 2017 before I would belooking to apply for a mortgage and by then the only negative records remainingwould be the nine late payment markers in 2011.
The current available balance shown for the card is £7850(although this is not actually available, as the facility has been withdrawn),the outstanding balance is £1432 and I am paying £35 per month (which is inexcess of the minimum payment) in order to keep building the positive paymenthistory.
My questions are:
1. Will the 9 late payments be enough to scupper amortgage application, considering their age?
2. Would it be better to request a retrospectivedefault and lose the payment history?
3. Should I reduce the credit limit?
4. Is there anything else I can do to improve myposition?
Once the other defaults disappear, the only other recordsremaining on my file will be as follows:
- Phone bill split in to two sections - a loan forthe purchase of the handset and then the monthly tariff payment – Both arefully up to date and show no negative marks. The monthly tariff payments go back 6 years and the loan for the phone 12months since I last upgraded my phone.
- Bank overdraft of £900 – fully up to date andrecorded as a zero balance every month with no negative marks going back 6years.

[Pixie]

Re: Request a retrospective default or retain payment history?

Hi and welcome to AAD Damioni.

I'll ask others who are knowledgeable about defaults to look in.

[Never-In-Doubt]

Re: Request a retrospective default or retain payment history?

The records on my Credit file read as follows:

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2015	0	0	0	0
	OK	OK	OK	OK
2014	0	0	0	0	0	0	0	0	0	0	0	0
	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK
2013	0	0	0	0	0	0	0	0	0	0	0	0
	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK
2012	0	0	0	0	0	0	0	0	0	0	0	0
	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK	OK
2011	0	1	1	1	1	1	1	1	1	1	0	0
	OK	AA	AA	AA	AA	AA	AA	AA	AA	AA	OK	OK
2010	0	0	0	0	1	1	1	1	0	0	0	0
	AR	AR	AR	AR	AR	AR	AR	AR	AR	AR	AR	OK
2009					0	0	0	0	1	2	3	0
					OK	OK	OK	OK	AA	AA	BB	AR

Realistically, it will be January 2017 before I would belooking to apply for a mortgage and by then the only negative records remainingwould be the nine late payment markers in 2011.

Ok, well the fact that they started recording correct OK markers from November 2011 means that in December 2017 these AR markers will be completely gone as they only record the historic trailing 6 years.

The current available balance shown for the card is £7850(although this is not actually available, as the facility has been withdrawn),the outstanding balance is £1432 and I am paying £35 per month (which is inexcess of the minimum payment) in order to keep building the positive paymenthistory.

Continue with this - it doesn't hurt - if and when you're ready for the mortgage then pay this off and get it closed and then it'll get marked as settled and be very positive against any mortgage application (after November 2017 when the AR markers have gone).

1. Will the 9 late payments be enough to scupper amortgage application, considering their age?

I wouldn't apply in the January - I would wait until the November purely based on the risk of refusal and/or a higher rate - why not save a bit more and wait till the entry is gone and then you will get a much better rate? It's a hard one to call - I'd say after waiting 5 and bit years, why rush at the last hurdle? Your call really.....

2. Would it be better to request a retrospective default and lose the payment history?

Absolutely not and they won't need to - not if you're in a DMP as the AR marker is not derogatory in the same respect as a Default entry - I would consider the option I mention above.

3. Should I reduce the credit limit?

No need - when you pay it off before October 2017 then request (with the final payment) that the entry is marked as settled

4. Is there anything else I can do to improve myposition?

Not really.

Once the other defaults disappear, the only other recordsremaining on my file will be as follows:
- Phone bill split in to two sections - a loan forthe purchase of the handset and then the monthly tariff payment – Both arefully up to date and show no negative marks. The monthly tariff payments go back 6 years and the loan for the phone 12months since I last upgraded my phone.
- Bank overdraft of £900 – fully up to date andrecorded as a zero balance every month with no negative marks going back 6years.

Don't worry - each lender has their own criteria, the only downside right now would be the AR markers but to some lenders they see it as a good thing as it shows you tried when you were in shit - however, most will look at it in a negative way as the fact you did struggle - regardless. So if it was me I would carry on paying and settle and close the credit card DMP facility before October 2017 so by the November, it will read all positive markers and settled. That will look great on any mortgage credit search.

Good luck - questions? Post back

[SA Gold]

Re: Request a retrospective default or retain payment history?

Hi Damioni, Its also worth taking a look in the sub-prime area of the forums as there is some excellent advice on how to get your file primed and ready for that all important mortgage application. Once all the cr@p drops off, you can have a nice load of greens to coast you along.
Best
SA

[Damioni]

Re: Request a retrospective default or retain payment history?

Thank you all, great advice and cleared a lot of things up for me

[Damioni]

Re: Request a retrospective default or retain payment history?

Just to clarify, as the interest and charges are frozen on the account, and from what Lloyds are telling me, they consider the account to be closed, would they have to mark the account as Settled or could they still mark it as Satisfied? It seems they have no plan to reinstate the interest (I requested this previously (perhaps naively) in an attempt to reduce the impact on my credit rating). If the account was marked Satisfied, would this count against me on a mortgage application even if all payment history showed as up to date? If so, would a default registered back in 2010 not be preferable, as all record of the debt would disappear in 2016? I am considering taking out a credit builder credit card and would have 12 months or more of positive payment history at that point.

[Never-In-Doubt]

Re: Request a retrospective default or retain payment history?

Satisfied usually refers to closure. Settled usually refers to a settlement / deal / default / arrangement / whatever.

After 6 years, ie in 2017 a lender won't really care on the status so long as it's closed.

Forget the default theory. Seriously. That's suicide plus they don't have to default you.