Arrangement to Pay (AP)

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  • grumbler
    grumbler Posts: 58,629 Forumite
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    If it's a true fact, I don't see any reasons for it to be removed from the history. I don't think that lenders have any obligations to inform you about reporting facts, except, possibly, a default.
  • curve2722
    curve2722 Posts: 14 Forumite
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    Hi guys, sorry to bombard an old account but .....

    I was wondering what is best in my circumstances for example:

    I have an active payday loan (lending stream) sitting on my file from May 2014 when it went in to default (so stupid of me!). This loan is still active and still giving me red DF markers every month.

    What is the best situation i can do try and help myself obtain credit in the near future.

    The original loan was for £400 and is defaulted at £300 and speaking to the company directly they request £500 to clear it - which i dont have.

    My alternative is to call the debt people and go an AP.

    My question is, when it defaults in May 2014 and i go in to an AP April 2017, on to which date will it consider the 6 years before dropping off? (as long as AP is reported to CRA's and payments kept up to date).

    Thanks.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    6 years from default.
  • curve2722
    curve2722 Posts: 14 Forumite
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    ive been told that if you keep a clean 3yrs on your file you can normally get a mortgage preferably with higher rates.

    Going through an AP lets say cleared by Aug 2017 and I apply for mortgage Aug 2018, will this AP have a negative affect?

    Way i see it is, either pay the company in full or try and avoid in paying (hoping no CCJ occurs) in order for a mortgage to go through for next year - since what ive read 3yrs clean file is normally ok for mortgage applications.

    then again, the mortgage provider may see outstanding debt over 3 years ago and consider this worse then an AP from a year ago.... still not sure what my better option is (except for paying in full).
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    The AP is irrelevant. The default is what is showing on your files.
  • eskbanker
    eskbanker Posts: 31,039 Forumite
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    Are your mortgage aspirations realistic anyway, i.e. if you're unable to raise £500 to pay this off in full, how would you intend to round up a mortgage deposit by next year (and then service the mortgage itself thereafter)?
  • Rah25
    Rah25 Posts: 2 Newbie
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    The whole AP scenario sounds like it is completely arbitrary and depends on how seriously each individual lender considers it to be, and every lender has their own criteria and the right not to disclose what their reasons are for refusing you credit.

    I think it's criminal that the best you might get from a lender before them putting you on an AP is "this may affect your credit rating", considering what a long term and damaging impact it can have! They are covering their asses and the borrower is agreeing to it without knowing what this means but has no comeback. Amazing that this is legal in today's society of demanding transparency in everything. "Buyer beware" still applies, clearly :/

    I am interested to hear that the Notice of Correction can itself have a negative impact!!! What if you lost your job or something 3 years ago so all of your finances were affected temporarily but you have since regained employment, proved yourself and got back on track with a great record?

    If you ask for a Notice of Correction this could actually look WORSE, and make you seem even less trustworthy, like "the dog ate my homework" scenario??!

    On the one hand I'm hearing that the most recent (say last 36 months) information is the most crucial and relevant for lenders but that historical "blips" can seriously affect your score EVEN if you made the effort to manage them at the time with an AP.

    Is the bottom line that lenders can do whatever they want as they are the ultimate decision maker? :(
  • chattychappy
    chattychappy Posts: 7,302 Forumite
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    Rah25 wrote: »
    I think it's criminal that the best you might get from a lender before them putting you on an AP is "this may affect your credit rating", considering what a long term and damaging impact it can have!

    Nonsense. Everybody knows that when you borrow money, you agree to pay it back on time. If you don't stick to the agreement, then lenders can sue you and (ultimately) take any assets you have, get an attachment to earnings etc.

    An AP is a concession where you say you cannot stick to what has been agreed, and you come to some sort of arrangement to delay payments and/or reduce the interest. Why shouldn't the fact of this arrangement be recorded? Why shouldn't other lenders be able to take into account the fact that having borrowed money on agreed terms, you then run into difficulty?

    I suppose if it wasn't recorded, then people could run up more debt and you would complain about irresponsible lending or misselling? Meanwhile others would have to pay more to borrow as risk assessment isn't so well informed.
  • Crystal_Pixie
    Crystal_Pixie Posts: 88 Forumite
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    chattychappy wrote: »
    Nonsense. Everybody knows that when you borrow money, you agree to pay it back on time. If you don't stick to the agreement, then lenders can sue you and (ultimately) take any assets you have, get an attachment to earnings etc.

    An AP is a concession where you say you cannot stick to what has been agreed, and you come to some sort of arrangement to delay payments and/or reduce the interest. Why shouldn't the fact of this arrangement be recorded? Why shouldn't other lenders be able to take into account the fact that having borrowed money on agreed terms, you then run into difficulty?

    I suppose if it wasn't recorded, then people could run up more debt and you would complain about irresponsible lending or misselling? Meanwhile others would have to pay more to borrow as risk assessment isn't so well informed.

    The debate is more about being penalised for paying a debt rather than not.


    Barclaycard put me on a payment arrangement for four years. I cleared the debt but I will have this information on my file until 2020 because I paid this in 2014. If I had defaulted and not paid this information would have been off my file this year.


    I am happy for the correct information to be on my file - but if I had known I would have asked Barclaycard to default me instead.
  • redux
    redux Posts: 22,976 Forumite
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    Crystal_Pixie wrote: »
    The debate is more about being penalised for paying a debt rather than not.


    Barclaycard put me on a payment arrangement for four years. I cleared the debt but I will have this information on my file until 2020 because I paid this in 2014. If I had defaulted and not paid this information would have been off my file this year.


    I am happy for the correct information to be on my file - but if I had known I would have asked Barclaycard to default me instead.

    Speak to Barclaycard complaints team about this.

    They can alter the removal from credit files to 6 years from the start of the arrangement.
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