Error on credit file

[jumpy2012]

Some years ago, my partner had a joint bank account with his ex-girlfriend, held at Yorkshire Bank. After they split, she made a withdrawal that took the account overdrawn by around £1800. As soon as he found out, he froze the account. She made no attempt to repay the debt until the bank started chasing her. It was within an agreed overdraft limit, but with no money being paid in the debt wasn't going away. He agreed with the bank that his ex would pay £1000 and he would pay the rest, since he wanted the account closed and to protect his credit history, which is excellent.

He paid the £800 approx in two instalments, as agreed with the bank, and his ex paid the £1000 (on her credit card, apparently). Although his credit file on Experian remains clear, the bank have filed a default with Equifax and this is stopping our mortgage application in its tracks. The default amount is £367, which is the second instalment he paid. The bank accept that it has been repaid, and wrote a letter to clarify this to support our mortgage application, but it's not enough, we need them to say that they have made an error as well as getting the credit file corrected. It has taken two weeks since we found out about the error and we are getting nowhere. We've paid a deposit on a new house, my house is sold and we can't get a mortgage at this rate. It's causing an enormous amount of stress.

My partner needs to argue with the bank that the credit file is incorrect and it needs to be shown as clear, not default. Is there a legal definition of default in these circumstances? Is there an agreed procedure the bank should follow before filing the default, eg giving him written warning that a default will occur if he doesn't pay £x by whatever date? If we know that they have not followed the procedure, it will help us get the error corrected.

Thanks in advance.

If the bank made an agreement that he was liable for X amount and that his ex was liable for the rest (ie the amount currently outstanding) then this shouldn't affect his credit report as the default isn't his.

Go onto moneysavingxpert or similar and they will probably have a template letter for disputing things like this.

Thanks...there is no outstanding amount, they have both paid the agreed amount and the account is closed. The bank have already recorded a default on his credit file, despite this.

Difficult as there was actually a default on the account but it wasn't due to poor money management.

"Do make sure you review your report to check the default has been updated to "satisfied". If you want to explain on your report why the default occurred you can send a "notice of correction" to each of the three credit reference agencies - Experian, Equifax and Callcredit.

The negative impact that the default has on credit scoring will reduce over time and may eventually be outweighed by more recent positive repayment information. A reputable mortgage broker should be able to help you find a competitive deal based on your current circumstances."

Has the default been updated? Might be worth a try?

Contact experian and explain the situation and provide the letters

This happened to me last year and experian were actually very helpful in getting the default removed (the default should never have been there)

It's only experian that can remove the default now and they should be able to do so given that the bank have provided a letter confirming the monies were paid. May also be worth calling the FSA and explaining the situation and then contacting the bank again to explain the matter needs to be resolved ASAP-the bank should then contact experian direct to organise the removal of the default.

I had to do this last year and was under similar pressure with a remortgage. It involved a lot of phone calls but once I had contacted everybody it was dealt with very quickly (I think the call to the regulatory body helped, in my case ofcom)

Good luck let us know how you get on

How many years ago was it btw

It went overdrawn last year, the last payment was made last month, as agreed.

DP has been on the phone to the bank several times since then. At first they updated his ex's file, but not his!

To get our mortgage application to go through, it's not enough for it to show as satisfied/repaid, it has to be removed from his file completely.

Surely if you have an authorised overdraft, and then repay it in accordance with the agreed schedule, you have not defaulted?

Default or not-whatever definition you want to give it, the only people that can remove it are experian. They will only remove it if they are instructed to by the bank. The bank will only bother to help if they are under pressure to (say for example due to the fact they have a potential FSA complaint on the go!)

The mark against my file that was removed last year was a 'default'

They shouldn't have put a default on. They also should have issued a default notice at the time. Did your oh get a letter?

No, he didn't get a letter. I am not sure though that he would have received one, mail addressed to him at his ex's address is forwarded by Royal Mail, but if there was a letter addressed to both of them, it may not be. They contacted him by telephone to arrange the repayment schedule.

It's infuriating as he could easily have paid the £800 in one go, but they were happy with two instalments so he agreed to that! We have had two weeks of 'if only...'

Where can I find the 'rules' about receiving a default notice before it goes on his file?

The default notice would be sent to each individually - he needs to get in to the banks compliance team. Unless they cancelled the over draft snd insisted on a plan to pay it back the account was not in default.

An error was made when the account was frozen. If the froze the interest and charges for an agreed amount to close it they may have defaulted it in error.

It sounds as though at the time it was defaulted as they had to 'chase up' the money. Unfortunately he was just as liable as it was a joint account. I don't think he can get it removed if that's the case.

Yorkshire Bank have admitted the default was an error, written a letter confirming this that has been passed on to the mortgage company, are in the process of getting it deleted from his credit file and our application has now been approved - hooray!

That's great.