How will cancelled Wonga loans affect credit ratings?

Dear James,

Wonga has recently announced it is cancelling loans owed by a number of customers following a review of its lending criteria. Can you tell me what will happen to these people’s credit reports and when, and how this will affect their future credit ratings? Thanks.

Ben, Brighton


Dear Ben,

I’ve received a few questions on this issue, so let me explain what’s happening. Firstly, it’s essential that credit reports represent an accurate record of someone’s credit commitments.

To this end, we’ve been working with Wonga to make sure that affected customers’ credit reports are updated in a timely and appropriate manner.

The result is that we are completely removing all record of these loan accounts from customers’ credit reports. A record of the loan application being made will remain but this will not show whether the loan was accepted or refused.

This change is due to take place in early November and affected customers do not need to take any action. However, if you took out one of these loans and want to check that your credit report has been updated you can easily do this via the Experian website.

CreditExpert customers will simply need to login to check their up-to-date report.  In terms of the impact this change is likely to have on affected customers’ credit ratings, I understand that the vast majority of these customers were in default on their loans.

The effect of removing a default from your credit report is likely, of course, to be positive for credit scores, but this will always depend on a number of other variables, such as the other information on your credit report and the policies of the lender calculating your credit rating.

James Jones Signature

To see the top questions answered by James, visit the top questions page.

27 thoughts on “How will cancelled Wonga loans affect credit ratings?

  1. Michael Brown

    What about those that are having their interest payments cancelled but still to pay back the loan, will the credit record be erased and if they enter a payment arrangement with Wonga for the 4 months or even default on the loan will this show in due course on their credit report?

    Reply
    1. Neil Stone

      Hi Michael,
      Thank you for your comment. As those loans have not been cancelled they will continue to be reported to the credit reference agencies to show the facts, including any adjusted balance, arrangement that is made or any default.
      Kind Regards
      CreditExpert Neil

      Reply
      1. Michael

        Thank you for that, I have a family member that got that email and got very confused as they are within the 45000 that don’t have to pay interest. Although, Wonga have created a grey area with this. How can it be told to one group of people their debts and defaults will be wiped because they didn’t pay and another there credit report will be impacted even though they are paying it back, albeit over a longer period of time when both groups of people should never have had their loans approved in the first place. I have a feeling payday loans are going to go down the road of the PPI claims.

        Reply
  2. David

    Hi James,

    Will all loans from Wonga be treated in the same way, as mentioned above? The issue I had trouble with is when the loan was repaid or rolled over, it gave the impression there were multiple loans taken out on my credit footprint. This happened from 2011-2012. For example, will there be a record of every single loan application for each loan that was taken out but will not confirm if approved or not? or will it show just one entry for Wonga which again will not show if approved or declined?

    Thank you,

    Reply
    1. Neil Stone

      Hi David,
      Wonga will contact you if your loans are affected. Any searches that were recorded will remain on your report, however these are removed from your report automatically after a year, and after six months the impact they have on your score is reduced.
      Lenders who search your report will not know if the application resulted in an account being opened or not.
      Kind Regards
      Credit Expert Neil

      Reply
  3. Lee

    Hello, I have had multiple loans with wonga that I have always paid back on time. They have confirmed I am to be refunded interest and charges for my previous loan but not confirmed if this will be for all of them. Can you tell me if all or just the most recent loan information will be removed from my credit file? Many thanks.

    Reply
    1. Neil Stone

      Hi, Lee
      Wonga are currently in the process of contacting all their affected customers to let them know what action they are taking. If you are unsure whether the loans that you have with them will be removed you may wish to check with Wonga directly.
      Regards
      Credit Expert Neil

      Reply
  4. David T

    Hi,

    I checked my credit report today and I noticed that I still have around 10 accounts with Wonga listed on it (all settled). Is it possible for me to have these completely removed from my report though, and if so, how do I do this?

    Regards,
    David

    Reply
    1. Neil Stone

      Hi David, thanks for your comment.

      Wonga have been contacting their clients whose loans were being cancelled. If you have not heard from them it is likely that they will not be removing these entries from your report, as this was only for loans that they felt weren’t suitable. Wonga will be able to confirm this for you if you contact them.

      As the accounts are settled then they will stay on the report for six years and then come off automatically, as they get older they will have less of an impact on your report.

      Kind Regards
      CreditExpert Neil

      Reply
  5. Marie

    My son in law was the victim of fraud and someone took out a Wonga loan in his name. He has reported it to the police, has a crime number and reported it to Wonga yet it still appears on his credit report. He has been told that because of that he will be unable to get a mortgage. What can he do?

    Reply
    1. Neil Stone

      Hi Marie.

      Having a default on his report that was a result of fraud must be very frustrating for him.

      If you could ask him to contact us, we can get our dedicated Victims of Fraud team to investigate this for him. They will be able to contact Wonga on his behalf and mark the entry as disputed while they do this.

      They would also be able to provide advice on how to help fraud occurring again in the future.

      Kind Regards
      CreditExpert Neil

      Reply
  6. sarah

    Hi i have wonga and pduk loans on my credit file that have been settled even though they are only one loan they are reported individually can i get all data of payday loans wiped off my credit report

    Reply
    1. Neil Stone

      Hi Sarah, thanks for contacting us.

      Wonga have contacted those affected by the loan cancellation directly. If you haven’t heard from them then the loan would remain on your report.

      We keep closed accounts on a report for six years from the date that they are closed, and after that they come off automatically.

      A loan can appear twice on a report if it has been passed to a collection agency, the original loan will then be marked as “debt assigned” so any lenders who view the report will know that debt has been passed on.

      If you would like us to look at these accounts in more detail for you please contact us and we will be happy to help with this.

      Our contact details can be found here.

      Regards
      CreditExpert Neil

      Reply
  7. Maria

    My daughters partner has discovered a Wonga loan was taken out in his name fraudulently. Wonga are aware and so are the police – he has a crime number. However, this loan appears on his credit report and was obviously not paid (it was threats of debt collection that meant he found out about the loan). How can he get it removed as it is preventing him obtaining a mortgage? Thanks for your help

    Reply
    1. Neil Stone

      Hi Maria,

      We can certainly help with any entries appearing on a report that are the result of fraud.

      If you daughter’s partner contacts us with the details our Victims of Fraud team can get this investigated for him, and contact the company on his behalf.

      He may also find it helpful to take a look at our Identity Fraud Centre which provides useful advice on what to do if find fraudulent information on your report, or are worried about fraud.

      Kind Regards
      CreditExpert Neil

      Reply
  8. Laura

    Hi,

    My loan should not have been approved by Wonga . I struggled and managed to beg and borrow and scrape together just enoughnmoney to pay a full and final settlement only 3 weeks before Wonga announced that outstanding loans would be written off (I would have had mine written off if I’d not tried my hardest to pay it off). Unfortunately this now means my defaulted Wonga loan remains on my credit file but would have been removed had I not bothered to try and repay. This is so unfair as I am in a worse situation for having to struggle to settle it. Is there anything I can do about this?

    Kind regards
    Laura

    Reply
    1. CreditExpert Neil

      Hi Laura,

      I can see this would be frustrating as you were working hard to pay off the loan. You can add a notice of correction to your report to explain the situation.

      Any lenders who search your report would be obliged to read this, they can then take your comments into account. You can find our more about adding a notice of correction here

      Kind Regards
      CreditExpert Neil

      Reply
  9. Ben

    Hi, I was told by Wonga my default would be removed about 7 months ago now! Could you please get back to me as of why it still remains.

    Ben

    Reply
    1. CreditExpert Jarv

      Hi Ben

      Once we receive updated information from your lender update your credit report as quickly as possible.

      So that I can locate your information and discuss this securely, could you please get in contact with us here – http://www.experian.co.uk/consumer/contact-us/index.html including your full name, date of birth, full address including postal code, if you also have your 8 digit reference number, this would be of great help, but if not don’t worry.

      We will be able to query the information that has been recorded on your credit report directly with the lender on your behalf if you feel that the information is incorrect/should be removed.

      Thanks
      CreditExpert Jarv

      Reply
      1. Ben

        Cheers for the quick reply, I have also emailed from my hotmail account with my ref number. If you look it up you should find it.

        Regards Ben

        Reply
  10. Paul

    hi Neil
    I had a wonga loan which I fell behind with after loosing my job. I set up a payment arrangement through a debt management company and made monthly payments to wonga. However wonga still defaulted me. In October last year I received a message from wonga saying that they was changing to a new system and I no longer had to make repayments the debt would be wiped.

    The default of my credit file reflects a zero amount owing. But it is still a default and having a negative effect on my credit status. I never received any default notice from wonga and I was making regular payments to clear my debt.

    Should I have been defaulted? And if they have wiped the debt should they also wipe the default.

    Your advice is appreciated

    Reply
    1. CreditExpert Jarv

      Hi Paul

      Wonga has been contacting their clients whose loans were being cancelled.

      As mentioned previously by my colleague Neil, If you’ve not heard from Wonga it is likely that they will not be removing these entries from your Experian Credit Report, as this was only for loans that they felt weren’t suitable.

      Wonga will be able to confirm this for you if you contact them directly.

      As the defaulted accounts would be showing as settled on your credit report they will remain on the report for six years then will be automatically removed, whilst the age of the account matures this will have less of an negative impact on your report.

      If you wanted to contact us directly to take a look through your credit report to make sure the information has been recorded correctly or if you wish to query the information that has been, you can find our contact details here – http://www.experian.co.uk/consumer/contact-us/index.html

      Regards
      CreditExpert Jarv

      Reply
  11. benny

    just checked my credit file , it is showing a wonga loan in arrears and in default, since all my loans were paid on time this is very worrying, i have notified the reference company that there were never defaults or arrears on any wonga loan, i have checked with my bank , and it shows all payments were made , so clearly wonga has made a big error, the strange thing is i also got an other wonga loan after these dates and paid that back on time also, why would they even give an other loan if i was late or defaulted, i have been meticulous with these loans as interest is so high, but the can be useful for short term borrowing, what can i do ,

    Reply
  12. benny

    jUST CHECKED MY REPORT AGAIN , although it is showing late payments for 6 months then default , on the balance page it is showing zero balance for all this period , ??? so in effect they are saying i was late paying , when nothing was owing and i am default for a zero balance, how do i put this right ???

    Reply
    1. CreditExpert Neil

      Hi Benny, from your comments I understand Wonga have recorded a default while the balance on the account was zero. We can raise a dispute on your behalf with Wonga while we do this we will mark the entry as disputed. So any lender searching your report will be aware it is being investigated. Once we get a reply from Wonga we will contact you to let you know the outcome and any further steps you can take should you need to. Our contact details are available here. Kind regards Neil

      Reply
  13. Lucy

    I took out a wonga loan and paid it back early, now I am being declined of obtaining another loan from various other companies. I don’t understand why? Has my credit score been affected?

    Reply
    1. CreditExpert Neil

      Hi Lucy, opening new accounts will always have an impact on your credit report. Lenders may be concerned that you could become overcommitted if you have taken out recent loans and are now applying for further credit. In addition if you have a number of recent searches lenders may think that you are “credit hungry” and so be cautious about further lending. Our Ask James page also covers pay day loans here. Kind regards Neil.

      Reply

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