Should my default accounts show if I'm paying through a debt management company?

Dear James,

I have a client with 3 "defaulted" credit cards on her file.  However, she has been using a debt management company to pay these off and has paid this company consistently over the past three years.  Should the credit cards really be showing as defaults if a debt management company took over and the debt is effectively being paid?

James, Portsmouth

Dear James,

Although your client used a debt management company to help support her with her repayments, if someone does not keep up with the repayment terms on an account the lender can still mark this as ‘default’ on the credit report if/once the arrears meets industry guidelines for registering a default. It’s important that credit account records reflect the facts. Once an account is marked as defaulted, it will stay on the credit report for six years from the original default date. If the outstanding debt is being reduced, the balance should be updated each month to reflect this. Should the debt be cleared within the six years then the entry should be marked as ‘satisfied’, which will be visible to any lenders carrying out a credit check. We also have this default guide you may find useful to read for further information.

James
                        Sign

Take control of your finances with CreditExpert

Daily Experian Credit Score

Daily Experian Credit Report

Understand and improve your score

UK call support

Credit Report alerts

Web monitoring

Enhanced fraud support

Learn more →