My mum took credit out for me and I didn't repay on time. What can I do?

Dear James,

My mother opened an Argos store card in her name for me as I didn’t have good enough credit. I defaulted on this store card several times due to financial difficulty, my mum didn’t realise and I was too afraid to tell her. I opened the mail and hid the default letters. Eventually I paid the card off but my mum's credit score is adversely affected and she can no longer apply for a mortgage. I have ruined her life and the guilt is killing me - I didn’t realise defaulting was so bad. I thought only CCJ's stopped someone getting a mortgage. What can I do?

Michelle, Devon

Dear Michelle,

I’m sorry to hear about your difficult situation. I’m sure you can now understand it’s always important to make payments on time, or deal with problems as early as possible. This is really important if someone has used credit and trusted you to repay this on time.

It sounds like the default has been recorded correctly since you and your mother didn’t make the required payments to the account. Credit reports should reflect the facts so it’s highly unlikely the company would agree to remove or change this information.

Defaults stay on a credit report for six years from the date of default. It’s good that you’ve now cleared the debt because some companies have rules about not lending to people with unpaid defaults. However, as you’ve discovered, a paid default is still likely to affect your mother’s credit score, although it should have less of a negative impact as time goes by. The default might limit what credit your mother is accepted for and how much she pays for it.

Your mother might want to add a statement to her report to explain why the default is there, which is called a ‘notice of correction’. Although it won’t change the details, it will let her explain the reason why it’s showing. If she would like the statement to appear on the reports held by each of the three main credit reference agencies (Experian, Equifax and Callcredit) she will need to contact each one separately.

Finally, if getting a mortgage is a priority, even with negative information there may still be lenders willing to give her a deal. Make sure your mother uses quotations and eligibility checks before she applies. She might also think about approaching a whole-of-the-market mortgage broker, which is often a good call for people with a chequered credit history. When using a broker always ensure you check any fees they may charge, if they aren’t free. (February 2018)


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