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Law Reform: Term of Default Notice |
8 Signatures |
Published by Ivan Newton on May 08, 2008
Category: Consumer Affairs
Region: United Kingdom
Target: Financial Institutions: Lenders and Credit Reference Agencies
Description/History:
There is no legislation which states a Default Notice should remain on an individuals credit file for six years, yet it remains the policy of Credit Reference Agencies to retain such information for this period of time due to reference made to such cases by the Crowther Report.
It is apparent that there are varying severities of Default i.e. amount, time taken to settle, time period, etc, however regardless of this, any default issued will remain on an individuals credit file for six years.
Assuming a CCJ is worse than a Default Notice (as a CCJ is a court order, in most cases following a Default Notice), this can be removed if the balance is paid within one month of issue as stated on Experian which would indicate a Default Notice is actually more damaging than a CCJ.
It has been considered that six years is sufficient protection for lenders to assess an individuals credit worthiness, however this can not be the case as we believe the amount of default should be taken into account.
For example, if an individual has defaulted on a loan agreement for £200, this is a small amount compared to that of a default of £2000, etc.
It is apparent that there are varying severities of Default i.e. amount, time taken to settle, time period, etc, however regardless of this, any default issued will remain on an individuals credit file for six years.
Assuming a CCJ is worse than a Default Notice (as a CCJ is a court order, in most cases following a Default Notice), this can be removed if the balance is paid within one month of issue as stated on Experian which would indicate a Default Notice is actually more damaging than a CCJ.
It has been considered that six years is sufficient protection for lenders to assess an individuals credit worthiness, however this can not be the case as we believe the amount of default should be taken into account.
For example, if an individual has defaulted on a loan agreement for £200, this is a small amount compared to that of a default of £2000, etc.
Petition:
We, the undersigned, call on the Government to create legislation for clarity and fairness both to the Lenders and Debtors.
Proposal 1
To set a time limit for Default Notices to remain on an individuals credit file dependant on the amount of default i.e.
*FOLLOWING DATE OF DEFAULT SETTLEMENT*
£1-1000: 1 Year
£1001-2000: 2/3 Years
£2001-3000: 3/4 Years
£3001-5000: 4/5 Years
£5001+: 6 Years
=======================================
OR
=======================================
*FOLLOWING DATE OF DEFAULT SETTLEMENT*
To set a time limit for Default Notices to remain on Credit Files for 4 years which we consider to be a more fair and general time frame to be set considering there are varying amounts of default and individual circumstances which should be considered.
Proposal 1
To set a time limit for Default Notices to remain on an individuals credit file dependant on the amount of default i.e.
*FOLLOWING DATE OF DEFAULT SETTLEMENT*
£1-1000: 1 Year
£1001-2000: 2/3 Years
£2001-3000: 3/4 Years
£3001-5000: 4/5 Years
£5001+: 6 Years
=======================================
OR
=======================================
*FOLLOWING DATE OF DEFAULT SETTLEMENT*
To set a time limit for Default Notices to remain on Credit Files for 4 years which we consider to be a more fair and general time frame to be set considering there are varying amounts of default and individual circumstances which should be considered.
The Law Reform: Term of Default Notice petition to Financial Institutions: Lenders and Credit Reference Agencies was written by Ivan Newton and is hosted free of charge at GoPetition.
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