The Importance of Checking Your Creditor Default Dates

Once you’ve settled your IVA, been discharged from bankruptcy or simply completed your debt management plan….you’ve made it, so congratulations are in order! The hard work of paying back the money you owe is over and you can look forward to a more prosperous and financially stable future.

However, before you get too carried away, there are still some things you need to do in order to help your credit status recovers as quickly as it should. One of those things is checking that your credit file reflects your new debt free status, as it doesn’t always get communicated to all three of the UK’s credit reference agencies Experian, Equifax and Noddle (Call Credit).

What will tend to happen is that when you settle your debt with a creditor, that creditor will inform just one of them and not the other two. Creditors aren’t obliged to inform all three, so it’s down to you, the debtor, to ensure this new state of affairs has been communicated to all of them.

Credit Controller

With any company that you might owe money to, delinquent accounts are the responsibility of the credit controller, so this is the person that you need to report incorrect information to about you or specific default dates. Should your defaults be showing as later than the start of your IVA or bankruptcy, then this needs to be rectified as soon as possible. Typically, your IVA or bankruptcy will be on your credit file 6 years from the date it started. Applying for a mortgage or other types of credit is going to be curtailed if your file is still incorrectly showing as having active defaults after the agreed date.

Write, Don’t Phone

When you do contact the offending creditor, it’s recommended that you do it in writing and you address it to the aforementioned credit controller. If you phone it in, they’ll likely just ask you to write in and if you call the credit reference agency, they’ll tell you to do the same. Save yourself time and stress by writing first. Using an IVA as an example the letter can be wording like the bellow;

re: [account/reference xxxxxxxxxxxxxxx]

I started an Individual Voluntary Arrangement (IVA) on dd/mm/yyyy. You can confirm this by checking the Insolvency Register at https://www.insolvencydirect.bis.gov.uk/eiir/.

I am writing to ask you to correct my credit file for [details of your debt with the creditor, including the account number or reference number]. This debt is included in my IVA.

At the moment [there is no default date shown / the default date is shown as dd/mm/yyyy]. This is incorrect and a breach of the Information Commissioner’s Office guidelines and the Data Protection Act 1998. There should be a default date not later than the start date of my IVA.

Please correct this entry within 28 days or supply me with a written reason why you will not do so.

We’d also recommend that you keep a copy of this letter for your own records, just in case it gets lost in the post! It doesn’t cost that much more to get the letter signed for on delivery, so if you want to make sure your creditor definitely gets it, recorded delivery might be an idea.

In Conclusion

Verifying that the credit reference agencies all have the right information on you is an important job which often gets overlooked. If more people knew the impact of not doing it, then it probably wouldn’t get forgotten as much as it does. At Niche Mortgage Info, we are dedicated to ensuring that people get the information and assistance they need to get on with their lives after financial issues.

For more information on this and all matters relating to getting a mortgage after all types of bad credit, take a look through our website www.nichemortgageinfo.co.uk.

Thanks so much for reading our blog and we’ll see you next time.

Clean Up Your Credit and Improve Your Chances of Mortgage Approval

For those who have come out of the other side of adverse credit issues, the light at the end of this dark tunnel is a welcome sight. Settling your debts to the satisfaction of all of your creditors is a great feeling, but the work of increasing your credit score will just be beginning.

Whether you’ve had an Individual Voluntary Arrangement (IVA), Debt Management Plan (DMP) or been declared bankrupt, your credit score is going to be pretty low, whether you’ve cleared them off or not. If you haven’t yet finished your payments, you will have to wait until you have to work on your score, but the moment it has, you can.

Paying All of Your Bills On Time

What some people don’t realise is that the way you manage your utility bills can have an effect on your credit score, even if you haven’t got to the stage where you’re being threatened with debt collection agencies. If you’re regularly late in paying your gas, electricity or even your mobile phone bill, it can hit your score, which means that pay your monthly bills on time is one of the aspects of your financial management that you need to get right. The best way is to have all of your bills taken care of by direct debit, so you don’t forget.

Get Yourself Some Credit

Whether this feels like something you’d like to avoid or not, getting used to using credit again is important if you want mortgage lenders to view you in a more favourable light. Taking out a bad credit credit card and using 10-15% of the overall available balance will demonstrate your ability to manage credit responsibly over a sustained period.

Avoiding credit can seem like the best option, especially if you’ve had issues with them before, but not using credit at all can work against you, as it will seem like you’re staying away from it because you’re still not able to manage it. Not something that those offering credit really want to see.

A Vanquis Bank Bad Credit Credit Card is something that we often recommend people to take out for this very purpose. We’re certainly not recommending you go back to relying on credit, but managing a low risk, low limit balance (10-15% of your total available) and paying it off each month can give your score a welcome boost.

Another excellent financial product for boosting your credit score is called Loqbox and it operates in a similar way to a savings account. You pay into it your Loqbox for 12 months and you get your money back at the end. As this arrangement is technically seen as a credit agreement, it provides you with a vehicle for illustrating your ability to repay credit. It’s a very popular option for those looking to give their credit status a shot in the arm.

In Conclusion

If you’re recovering from money problems and have ambitions of getting a mortgage at some point in the future, then you need to be looking at not just affordability, but also at helping things along by increasing your credit score. The specialist mortgage brokers we work with at Niche Mortgage Info have access to mortgages designed for people in all sorts of financial situations, but it certainly doesn’t hurt to do everything you can boost your status in the eyes of credit reference agencies like Equifax, Experian and CallCredit.

The more you do in preparation for your mortgage application, the better your chances will be. It can really mean the difference between a no and a yes!

For more information on anything discussed here, take a look through our site www.nichemortgageinfo.co.uk.