Your views and questions.

Moderators: TalbotWoods, JaneClack

By wasfine1981
#304193 Hi

i am after a bit of a pros and cons list really of making full and final offers with creditors. I know most of them are obvious but i just want to be clear inmy head what they are before i consider if its an option for me. I am thinking mainly in terms of the effects it will have on my credit rating for getting a new morgage compared to paying the balance of in full etc. Also if i can negotiate with the creditors to totally wipe my slate clean if i settle or pay in full, that kind of thing but would be greatful for any information i can get.
so if any one can assit that would be great
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By TalbotWoods
#304253 If full and finals are done correctly then there are advantages, such as your CRFs will show a Marker indicating that it is paid, but this can be shown as either satisfied or partially satisfied.

Another advantage is that you will have more money available each month.

Realistically though the damage will have come from the placement of the original default on your Credit files, this has more of an impact than late payment records, but it can also be a saviour for you.

Once a default is placed on an account (which can only be done once) that record will fall off your CRF six years form the date of the default, irrespective of if you are paying the account back or not. Consequently it is possible for someone who is paying multiple debts back religiously, to actually have a clean CRF (after the 6 years!)

National Debt Helpline have a good section on Full and Final Settlements, it could pay to have a read of this first, and then nip back here to ask any other questions

http://www.nationaldebtline.co.uk/engla ... ent_offers

Now moving on slightly, with regards possible mortgage applications, any adverse credit on your CRFs WILL impact on being able to get a mortgage, and theses adverse markers defaults, ect, will continue to show UNTIL they drop off the CRF.

The other aspect you have to remember is that in this current climate, even people with AAA+++ credit ratings are routinely getting turned down for mortgages, and this we beleive comes down to the affordability test, where lenders are saying OK you can afford now, but what happens when the interest rates jump back to their normal historic levels of about 5%, could you afford then??

There is an organisation called "Who's lending" that can be contacted on 0800 1978435, who specialise in matching you with an ethical not so good credit rating mortgage provider, so may be worth contacting them. You can also email them on mortgage@payplanfinancialservices.com