A credit listing downgrade is a term often used in credit repair. It relates to a credit listing being reduced in severity.
An example of this is a Clearout or Serious Credit Infringement listing being downgraded to a Payment default.
A Clearout or Serious Credit Infringement is a more serious listing than a Payment Default and has a more adverse effect on a person’s credit score and is recorded on a credit file for a seven year period as opposed to five years which is the recording period of a payment default. The reason for this is the definition of this listing is someone that is purposely avoiding their reasonability’s under a contract, the easiest way to remember this is think of the name of the listing being a Clearout, as in the person has cleared out. In reality there are a number of reasons a Clearout or Serious Credit Infringement could be recorded inappropriately, for example a change of address, however once this type of credit listing is recorded it has the capacity to course significant trouble for up to seven years.
With a Payment Default the only form of notice a credit must provide is a demand letter that must be sent to the client’s last known address. This is quite different to a Clearout or Serious Credit Infringement as the credit provider must make repeated attempts to contact the client on all known forms of communication, this can include mail, phone, email or even as far as sending an agent to the last known address. If it can be proven the credit provider did not fulfil this obligation and only sent a demand letter (which is common) it can be possible to have the Clearout or Serious Credit Infringement listing downgraded back to a Payment Default.
Why is this a good thing ? Firstly it will almost always improve the persons credit score as a Payment Default is not seen as quite as serious as a Clearout or Serious Credit Infringement. Secondly and most importantly it will reduce the listing term from seven years back to five years. Imagine if the Clearout or Serious Credit Infringement listing was already more than five years old at the time it was downgraded to a Payment Default, this would mean the listing would be removed altogether. At worst it means that the listing will be removed from the persons credit file two years sooner.
At Clean Credit we see many different types of credit listing and are often successful in having Clearout or Serious Credit Infringement listings removed or downgraded to a Payment Default for our clients. Having a credit listing like this removed or downgraded can change a person life and allow them to qualify for finance once again.