Credit reference files and partial settlements

[Riz]

When a creditor accept a F&F in settlement of a debt, they are entitled to record that accurately on your credit record.

While it should show that the debt is settled and that nothing more must be paid, it is allowed for the creditor to mark your credit reference files with a marker that says "partially satisfied/settled".

ICO guidance states:

Where the lender has accepted as part of a negotiated settlement a payment that is less than the outstanding amount and the customer has agreed as part of the settlement how their credit record will be affected:

In these circumstances, we understand a lender may be reluctant to mark the entry as ‘satisfied’ or ‘settled’. However the entry must record the position adequately, for example, by showing that no further monies are expected and the account was partially paid.

So so many people get hung up on thinking that all credit records should show things as satisfied in full, but this is not true.

The most important thing is to get a clear statement in writing from the creditor that all your liabilities towards the debt are ended by the F&F.

[onesteptoofar]

Re: Credit reference files and partial settlements

Hi rizzle,

I've got a few queries on this subject as i'm still a little sketchy.

Once your credit file has been updated by your creditor with "partially satisfied/settled/satisfied" etc following a f+f and assuming you already have a default on the debt...

1. Will your credit file be automatically in time or would you need to request its updated to the previous creditor / CRA in six years?

2. Is the six years from the default date, or from the date the f+f has been paid and "partially satisfied/settled/satisfied" is noted on your credit file?

3. Is there any point actively trying to improve your credit file whilst a default is present on your file?

4. If the answer to 3 is Yes. Is there a good link we could import to this forum?

As things stand i haven't agreed f+f's but am making progress. I have defaults, but would like to be able to be in a position to apply for a mortgage at some point down the line.

onesteptoofar

[Never-In-Doubt]

Re: Credit reference files and partial settlements

Hi rizzle,

I've got a few queries on this subject as i'm still a little sketchy.

Once your credit file has been updated by your creditor with "partially satisfied/settled/satisfied" etc following a f+f and assuming you already have a default on the debt...

1. Will your credit file be automatically in time or would you need to request its updated to the previous creditor / CRA in six years? After 6yrs from date of default the whole entry drops off your file forever.

2. Is the six years from the default date, or from the date the f+f has been paid and "partially satisfied/settled/satisfied" is noted on your credit file? The default date - always the default date.

3. Is there any point actively trying to improve your credit file whilst a default is present on your file? None whatsoever which is why I said to you forget the F&F offers cos once defaulted you should ONLY pay if they threaten court, otherwise you're throwing good money away cos half of them never take action anyway and being your credit file is dead for 6yrs as well, it's not like you care if you owe £2k or 20p cos you aint paying it! After 6yrs the default goes, but they can still chase you to pay until the actual Statute Barred date which is 6yrs from date of last payment which is obviously earlier than the default date.

4. If the answer to 3 is Yes. Is there a good link we could import to this forum? The answer is a big NO! Would you lend to someone with defaults?

As things stand i haven't agreed f+f's but am making progress. I have defaults, but would like to be able to be in a position to apply for a mortgage at some point down the line. Yea, after 6yrs otherwise expect to pay a damn high rate and also a high deposit - even that would generally result in a decline once they see the defaults. You need to wait til the defaults go and then apply - why not save the F&F funds for the deposit and then if the lender threatens court, you then negotiate a F&F? Also remember if the debt is older then F&F is easier to achieve cos they will also be aware of statute barred meaning they get zilch so even a 20% deal is a result to them in such situations

onesteptoofar

See replies in red - this is all detailed in my original thread if you'd looked! See here: ---> viewtopic.php?f=48&t=48

[onesteptoofar]

Re: Credit reference files and partial settlements

Hi Niddy,

Thanks again for taking the time to reply, you must be shattered after this week! The site looks excellent.

I have sent you a PM as a reminder for my persistence with f+f's.

I won't mix this thread up with my other one. Each of your answers is bang on the money and definitely questions why anyone would ever want to go down the f+f route.

Everyone has their own objectives. Does my reasoning make sense for the f+f route, or do you still think i'm bonkers?

I thoroughly respect your advice, and will follow it!


Off the subject:

Wonder if we could come up with a clickable basic way to direct newbies on entering the site?

When we are complete novices and the shit hits the fan if i'm anything to go by...we peruse the net for months before we actually begin to get the balls to post anything, and even then miss huge sections that you guys have spent hours developing. Foolproof navigation is the key.

I ought to beat myself with a stick for not aiming for defaults in four years ago, when things got tough and i started to google all the usual debt stuff.

[JohnS]

Re: Credit reference files and partial settlements

Hello,

Thanks for this website, it's brillaint, loads of helpful info.

My question is if you make an offer for F&F to a DCA acting on behalf of the creditor and they state in writing default will be recorded as satisfied with the CRA's do they have the authority to do this if the entry was made by the original creditor? Do they instruct the creditor to do this? Couldn't they just turn round and say no!

[Never-In-Doubt]

Re: Credit reference files and partial settlements

Hello,

Thanks for this website, it's brillaint, loads of helpful info.

My question is if you make an offer for F&F to a DCA acting on behalf of the creditor and they state in writing default will be recorded as satisfied with the CRA's do they have the authority to do this if the entry was made by the original creditor? Do they instruct the creditor to do this? Couldn't they just turn round and say no!

What happens, when a debt is bought by a DCA they take over the original entry by the Creditor and thus the original entry will usually be satisfied and/or deleted being replaced with the new version in preference of the DCA - however all details remain the same as per the original, so the default date etc will still be the same date.

In essence, you'll have one entry from the OC that must show settled and then you'll have a second that will show the default and settled default status. Only the latter will affect you, the settled original creditor entry is not derogatory and will have no effect on your credit file whatsoever.

[JohnS]

Re: Credit reference files and partial settlements

Thanks very much.

In my case I have a debt with Halifax and Iqor have started writing to me saying they are acting on behalf of Halifax so I'm not sure if they have bought it. What happens in this situation with regards to the entry?

[Never-In-Doubt]

Re: Credit reference files and partial settlements

Thanks very much.

In my case I have a debt with Halifax and Iqor have started writing to me saying they are acting on behalf of Halifax so I'm not sure if they have bought it. What happens in this situation with regards to the entry?

Nothing, it'll stay as HBOS unless they assign in totality to Iqor - unlikely... so the HBOS entry will remain.

[JohnS]

Re: Credit reference files and partial settlements

So if I paid the money to Iqor their is a chance that the debt wouldn't even be marked as satisfied?

[Never-In-Doubt]

Re: Credit reference files and partial settlements

So if I paid the money to Iqor their is a chance that the debt wouldn't even be marked as satisfied?

No it will be marked as satisfied by whoever owns the account, once it is in fact satisfied. Doesn't matter who does it so long as it is done, but a satisfied DN is the same as one outstanding - they are both as bad as each other and will have a detrimental effect on any credit applications made.

[JohnS]

Re: Credit reference files and partial settlements

Okay thanks.

Just for my future reference. Am I now right in saying when dealing with a DCA who are acting on behalf of a creditor, if you make a F&F to the DCA stating a condition is the CRA entry is changed to Satisfied they have no authority to do this? For a F&F I must go directly to the Creditor/ person who now owns the debt?

[Never-In-Doubt]

Re: Credit reference files and partial settlements

Okay thanks.

Just for my future reference. Am I now right in saying when dealing with a DCA who are acting on behalf of a creditor, if you make a F&F to the DCA stating a condition is the CRA entry is changed to Satisfied they have no authority to do this? For a F&F I must go directly to the Creditor/ person who now owns the debt?

Sorry? Where did I say any of that

No.

When a DCA writes, they take ownership from the OC so if you agree to a F&F with either the DCA or OC they will automatically mark it as settled but even if not, it does not matter in the slightest cos a default is derogatory - whether settled, outstanding or sitting there dormant.

If a DCA writes then they have underlining authority. So you deal with them and you never have to ask for the CRA record to be marked as anything, as they know their obligations and will do it anyway!

[JohnS]

Re: Credit reference files and partial settlements

Sorry I got confused.

I didn't realise "When a DCA writes, they take ownership from the OC". Earlier you mentioned "it'll stay as HBOS unless they assign in totality to Iqor - unlikely... so the HBOS entry will remain".

That's why I think I got confused. I wanted to know if I spoke to a DCA about a debt and arranged a F&F they have full authority to get this marked as satisfied with the CRA?

[Never-In-Doubt]

Re: Credit reference files and partial settlements

Sorry I got confused.

I didn't realise "When a DCA writes, they take ownership from the OC". Earlier you mentioned "it'll stay as HBOS unless they assign in totality to Iqor - unlikely... so the HBOS entry will remain".

That's why I think I got confused. I wanted to know if I spoke to a DCA about a debt and arranged a F&F they have full authority to get this marked as satisfied with the CRA?

Yes you're confusing owning and acting for.

ALL banks ship out their debts to a DCA - but they usually partially assign the debt meaning that they instruct x, y, z DCA to deal with the collection - so you deal with whoever that may be. If they send it to another DCA or back the bank then you simply deal with them.

In total assignment, that is where they sell the whole account to a new owner, usually a DCA.

Regards this satisfied marker - why are you bothered about that? It seems you're ignoring the finer details of that - forget it! It has no effect on you whether settled or not.

[JohnS]

Re: Credit reference files and partial settlements

Sorry I was just trying to get it clear in my head. Yes I can see now that it makes little difference what the status of the default is. Thank you.

My wife has a payday loan she took with a company in 2010. It shows up on her credit report with Equifax/ Call Credit as "Late Payment". The entry was made by the original creditor in 2010. However she received ane -mail form them in November of last year stating that Mackenzie Hall were now acting on their behalf. November was the point at which markers started appearing on the credit file as late payment. She thinks she did receive a default letter from the creditor last year at some point.

Could you please tell me why do you think this debt is not registered as default, just late payment. Could you give us some advice what you think teh best course of action is. The original loan was £200 but they are now saying she owes £1290 and this is the amount showing on the credit file. Obviously we don't want it to go to the default stage. What would happen if we paid it now? Would they mark it as settled or could they in theory change it to default and then mark it as satisfied? are we best trying for a F&F. If so shoudl we request they mark the credit files as settled?