Payment plan and credit report

[shamen]

Was hoping some of you may know the answer to this one.

A person has a default on their credit report, its 5 years 11 months old and its about to drop off. A DCA start chasing for the remaining balance. The person wants to pay off the balance in, say, 3 or 6 monthly instalments. Not an IVA, just paying off the balance in instalments.

When the default drops off, would the record of the 'payment plan' be recorded on the credit report for a further 6 years?

[Nibbler]

Re: Payment plan and credit report

When the default drops off, would the record of the 'payment plan' be recorded on the credit report for a further 6 years?

No. When the default goes, everything regarding the account goes.

[shamen]

Re: Payment plan and credit report

Thanks

[The Debt Star]

Re: Payment plan and credit report

No. When the default goes, everything regarding the account goes.

Correct. The one to look out for is settling a debt where there isn't a default, because the data gets "frozen" on the credit files for 6 years. Also Arrangement to Pay markers - these sit on a credit file for 6 years after the date the plan stops. Disastrous. Far betetr to have a Default than an AP imo as default drops off after 6 years regardless of whether the debt is settled or not.

[shamen]

Re: Payment plan and credit report

Cheers DS

So if there’s a default from mid 2005, about to drop off and an arrangement to pay is made today, the arrangement to pay would then stay on for a further 6 years?

[Nibbler]

Re: Payment plan and credit report

So if there’s a default from mid 2005, about to drop off and an arrangement to pay is made today, the arrangement to pay would then stay on for a further 6 years?

No.

1) As the account has been defaulted, any arrangement you come to shouldn't even be recorded on the file. The status will remain as a default.

2) All info for defaulted accounts is removed 6 years after the default. No exception.

DS is referring to a case where an arrangement is in place, but the creditor hasn't yet taken the formal step of recording a default on the account.

Once they do record the default, that is it. Done. Line in the sand drawn, and all info comes off 6 years after that.

[shamen]

Re: Payment plan and credit report

gotcha

cheers!

[The Debt Star]

Re: Payment plan and credit report

Which is why a Default is actually, as compared to an Arrangement to Pay, much better to have in the long run imo.

If I had a time machine I'd go back 6 years and default the lot. As it is I will have APs plastered on my cred files for many more years to come!
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No.

1) As the account has been defaulted, any arrangement you come to shouldn't even be recorded on the file. The status will remain as a default.

2) All info for defaulted accounts is removed 6 years after the default. No exception.

DS is referring to a case where an arrangement is in place, but the creditor hasn't yet taken the formal step of recording a default on the account.

Once they do record the default, that is it. Done. Line in the sand drawn, and all info comes off 6 years after that.

Nice clear advice Nibbler. Thx.

[Crispybacon]

Re: Payment plan and credit report

Absolutely agree.

I tried to ensure that I got defaulted on all my credit agreements before I started making DMP payments.

As it happened many creditors were not willing to even discuss payment arrangements until after I had defaulted. I guess this gave them 6 months to ramp up the charges and interest before flogging the debt off to a DCA and claiming tax relief on a much larger balance.

But also demonstrates how stupid some DCA's are as they threaten my credit file with a default for accounts that are already defaulted! Template threat-o-grams anyone?!

Crispy