Article by Tom Blandford - 22nd September 2021

Do I Owe A Debt If It's Not On My Credit Report?

Information that appears on your Credit Report should (in most cases) follow a fairly predictable lifecycle. But don’t think that if an unpaid debt no longer shows up, you’re no longer responsible for it.

Once a credit account has been closed for six years, it should be removed automatically by the Credit Reference Agency reporting it. The same timescale should also apply to accounts that were closed by the lender and placed into default, but even when that happens, you can still be pursued for any outstanding debts relating to it.

Although it is uncommon to have unpaid debt remaining six years after an account has been removed from your Credit Report, there are circumstances where this may happen.

How can this happen?

As a general rule, a debt is considered to be owed until it is paid in full, or if a satisfactory partial settlement has been accepted by the creditor. As such, it is possible to be pursued for unpaid debts even if they’re more than six years old and have dropped off your Credit Report.

Contrary to some wishful thinking, an unpaid debt doesn’t become written-off once it’s six years old. The Statute Barred status only prevents creditors from pursuing a debt through the courts, but not through other means.

That means if you’ve got an unpaid debt, or you’re still making payments towards a debt that no longer appears on your Credit Report, you are still responsible for the debt and obliged to pay it off.

Post judgment remedies

One example of this is if you are issued a County Court Judgment (CCJ) due to unpaid debts. A creditor can choose to utilise a post judgment remedy to enforce the debt, which is essentially the claimant's chosen way for you to repay the debt owed, based on your personal circumstances.

Some examples of post judgment remedies include orders to obtain information, attachment of earnings order, garnishee order, charging order or a writ of control (bailiffs).

Depending on the terms of the repayment plan set out by the creditor, you might end up paying for the debt for a period longer than six years, which means that the CCJ (and the account it relates to) will be removed from your Credit Report before the debt is paid off in full.

Incorrect contact details held by the lender

Another common reason for being liable for debts long after the account has been removed from the Credit Report is as a result of correspondence about the loan being posted to an incorrect address. It is possible for letters relating to unpaid debts to be sent to an old address if the lender isn’t given your updated details. Changing address is no excuse for evading unpaid debt, as you are required to inform lenders of such changes and again, it doesn’t mean that you will be able to get away without paying.

If lenders sell a debt

It is common practice for lenders to ‘sell’ bad debt on to collection agencies, rather than pursue it themselves, especially where the debt is small. Lenders can do this at any time, even if it becomes ‘statue barred’, so old debts can often re-surface when it is least expected.

That means it’s entirely possible any unpaid debt more than six years old could see a renewed interest once it’s acquired by a collection agency, long after the original account has dropped from your Credit Report.

In these cases, not only will you still be liable for the debt, but you could also find that a new record is created on your Credit Report by the collection agency which will remain for a period of six years from the date it was created.

If you receive a letter requesting payment and are unsure what it could relate to, this information should be readily available from the lender or debt collectors attempting to collect payment.

If debt collectors are sent to try and reclaim a debt, you can follow our guide so you’re fully aware of your rights and how to proceed.

Why does information drop off after six years?

Because one of the main roles of a Credit Report is to allow lenders to assess the Creditworthiness of a potential customer, the Information Commissioner’s Office (ICO) has ruled that six years is a reasonable time period over which this should be assessed.

Any credit information recorded before this time is deemed irrelevant to the information assessed by lenders when they check your report, because it no longer represents a fair assessment of your financial situation.

If you are still repaying a debt that no longer appears on your Credit Report, in all likelihood you may still need to disclose this information to any potential lenders you approach as this will affect your affordability, which in itself will have an impact on your ability to take out credit.

To find out more information about any debts within the last six years, including your payment history and whether the account has entered default or if it has resulted in a CCJ, you can check your Credit Report with data from three Credit Reference Agencies with checkmyfile.

If you haven’t already, you can try checkmyfile free for 30 days, then for just £14.99 a month afterwards, which you can cancel online at any time or by phone or email.

Updated by Sam Griffin on 22 September 2021

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