We often talk with clients that have unpaid default listed on their credit file that think if they pay the account the listing will be removed. But the reality is that your default most likely won’t be removed, even if you pay the account.
When a client is telling us about their credit issues they will often say “don’t worry about that one because I’m going to pay the account” they are saying this because they think if they settle the account the credit provider will remove the default.
Sadly we have to explain to people that in most cases this is not the case.
Veda Advantage, Australia’s largest credit reporting agency has made their position very clear. In their view a negative credit listing can only be removed if it was listed incorrectly. This means if there was a fault with how the listing was recorded or the listing party did not follow the required process prior to listing the event. Having said this, it can be of benefit if an account is paid or settled prior to or at the time we are engaged to have a default removed from a credit file.
While the payment of an account is unlikely to yield a positive result on its own it will generally put the credit provider in more helpful and compliant frame of mind which does often help to reach a favorable outcome.
I am sure if you were challenged in relation to the listing of a default for an account that you were still owed money on you would be naturally very defensive, while if the account had been paid you may be more likely to help, the same can be said for most credit providers.
For this reason we always advise our clients to settle their accounts as a part of the debt and default resolution process. Settling an account is also very important as even if a default is removed due to fault or error there is nothing stoping the credit provider either re-listing the default, selling the account to a collection company or commencing legal proceedings, all of which would result in a new negative credit listing being recorded which would negate having the original listing removed.
One thing to keep in mind is in many cases an account can be settled for less than what may be outstanding. Via our company Clean Credit Debt Resolutions we are often able to negotiate debts on behalf of our clients and in many cases save them thousands of dollars. We have saved some of our clients over 80% however savings of between 30% to 60% are common. The amount of the reduction is based on a number of factors such as the age of the debt, how far in arrears the account is and who the credit provider was.
With Clean Credit and Clean Credit Debt Resolutions working together we are often able to not only remove the default but also save our clients significant amounts of money in the process.