Main site > MoneySavingExpert.com Forums > Essential Money > Credit Cards > Arrangement to Pay (AP) (Page 1)

IMPORTANT! This is MoneySavingExpert's open forum - anyone can post

Please exercise caution & report any spam, illegal, offensive, racist, libellous post to forumteam@moneysavingexpert.com

  • Be nice to all MoneySavers
  • All the best tips go in the MoneySavingExpert weekly email

    Plus all the new guides, deals & loopholes

  • No spam/referral links
or Login with Facebook
Arrangement to Pay (AP)
Reply
Views: 15,554
Thread Tools Search this Thread Display Modes
# 1
noah271007
Old 14-04-2009, 10:50 PM
Serious MoneySaving Fan
 
Join Date: Jan 2009
Posts: 1,238
Default Arrangement to Pay (AP)

Hello guys!

I'm back from a long break, how have you all been? I hope no one have been missing me!

I will get the CRA's information updated as soon as possible, and start a new thread shortly. So Underground, just bear with me!

I have started a new thread on the subject of 'Arrangement to Pay' that some lenders report to CRA's.

AP has not been widely discussed so out of curiously, how damaging is AP on credit file? I know for a fact some lenders would accept payment plan to pay back debt like freezing purchase interest on account, but often do not discuss/inform to customer that accepting such plan would mean serious damage to their credit worthiness as a result.

Is it on par with one late payment or more?

Does it continue to affect credit worthiness for as long as 6 years?

I used to have several of them with 02, but they have removed the default and data off my credit files so i am lucky.
noah271007 is offline
Reply With Quote Report Post
The Following User Says Thank You to noah271007 For This Useful Post: Show me >>
# 2
Innocent_Guy
Old 14-04-2009, 11:00 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Nov 2008
Posts: 5,368
Default

I think it stays on your file for 6 years
Bank Accounts - Barlcays Premier[/B] - 1000 o/d, HSBC - 200 o/d- First Direct - 500
Credit Cards - [B]Barclaycard 2000 - Silver Card 1300 - Flybe 7500 - HSBC 1000 - First Direct 2500 First Direct Gold 3000
6 credit accounts closed in 2010!

Official SOS Club number 001 - Dry until 01.07.10
Innocent_Guy is offline
Reply With Quote Report Post
The Following User Says Thank You to Innocent_Guy For This Useful Post: Show me >>
# 3
Doshamento
Old 14-04-2009, 11:26 PM
MoneySaving Stalwart
 
Join Date: Jan 2009
Posts: 229
Default

Quote:
Originally Posted by noah271007 View Post

AP has not been widely discussed so out of curiously, how damaging is AP on credit file? I know for a fact some lenders would accept payment plan to pay back debt like freezing purchase interest on account, but often do not discuss/inform to customer that accepting such plan would mean serious damage to their credit worthiness as a result.

Is it on par with one late payment or more?

Does it continue to affect credit worthiness for as long as 6 years?
It is worse than one late payment or more...if registered with the CRA's.

Any debtor needs to clarify with the lender if any AP is to be registered with any Credit Ref Agency before any arrangement to pay an outstanding debt.

If it is registered to the CRA's by the lenders, then in the eyes of any creditor :-

an AP is equivalent to a 'default' with any prospective lender..........and will make borrowing almost impossible for the next 6 years of onset.
Doshamento is offline
Reply With Quote Report Post
# 4
noah271007
Old 14-04-2009, 11:27 PM
Serious MoneySaving Fan
 
Join Date: Jan 2009
Posts: 1,238
Default

Not necessarily 6 years as long AP recorded on account that are open and active. Experian remove last late payments/AP markers after 3 years on data payment history and Equifax 4 years.

How damaging is it having a AP? Is it on par with 1 late payment or on par just above default?
noah271007 is offline
Reply With Quote Report Post
The Following User Says Thank You to noah271007 For This Useful Post: Show me >>
# 5
never-in-doubt
Old 14-04-2009, 11:30 PM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Feb 2009
Location: Somewhere Secretly Secluded
Posts: 19,550
Default

Quote:
Originally Posted by noah271007 View Post
Not necessarily 6 years as long AP recorded on account that are open and active. Experian remove last late payments/AP markers after 3 years on data payment history and Equifax 4 years.

How damaging is it having a AP? Is it on par with 1 late payment or on par just above default?
AP is on par with a default/ccj/6+ late payments in that lenders will not touch you until it has gone which is 6yrs after the registered date (usually 3yrs show on a/c history with CRA's)

A/P is a bad thing don't be fooled by the myth that lenders see it as a good sign, they do not!
never-in-doubt is offline
Reply With Quote Report Post
The Following 2 Users Say Thank You to never-in-doubt For This Useful Post: Show me >>
# 6
Doshamento
Old 14-04-2009, 11:38 PM
MoneySaving Stalwart
 
Join Date: Jan 2009
Posts: 229
Default

Quote:
Originally Posted by noah271007 View Post
Not necessarily 6 years as long AP recorded on account that are open and active. Experian remove last late payments/AP markers after 3 years on data payment history and Equifax 4 years.

How damaging is it having a AP? Is it on par with 1 late payment or on par just above default?
Same as 6 years (default time) to a lender.

The marker sign of AP in RED, whether 1 month of late payment, or several months of good payment afterwards will still 'flag' warning similar to a 'default' message to other lenders, if the lender has entered an AP onto your credit file.
Doshamento is offline
Reply With Quote Report Post
The Following 2 Users Say Thank You to Doshamento For This Useful Post: Show me >>
# 7
noah271007
Old 15-04-2009, 9:19 AM
Serious MoneySaving Fan
 
Join Date: Jan 2009
Posts: 1,238
Default

Quote:
Originally Posted by Doshamento View Post
Same as 6 years (default time) to a lender.

The marker sign of AP in RED, whether 1 month of late payment, or several months of good payment afterwards will still 'flag' warning similar to a 'default' message to other lenders, if the lender has entered an AP onto your credit file.
Thanks for your replies and efforts guys - it is certainly an eye opener, and for anyone who are considering different payment terms on account like freezing purchase interest should confirm with lender before agreeing to it.
Get them to put in writing they will not send adverse data while on repayment plan.

How bad is 3\4 months late payments? I got a friend who have several of 3s and 4s in 7 month period on credit card account back in Nov 2005.
He has not missed further payments since.
noah271007 is offline
Reply With Quote Report Post
# 8
newlywed
Old 15-04-2009, 9:25 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Jul 2006
Location: beside the seaside, beside the sea
Posts: 7,460
Default

Quote:
Originally Posted by never-in-doubt View Post
AP is on par with a default/ccj/6+ late payments in that lenders will not touch you until it has gone which is 6yrs after the registered date (usually 3yrs show on a/c history with CRA's)

A/P is a bad thing don't be fooled by the myth that lenders see it as a good sign, they do not!
Is it 6 years after it starts? or 6 years after you finish paying it off that it shows?

On a DMP so my rating is shot anyway - but suspect that the AP might stay there longer than the default notices, if it stays till it's paid off

That's why it makes me laugh when one of my creditors makes out they are doing me a favour by charging me a low interest rate and promising not to adversely effect my credit rating - with 2 defaults and an AP I don't think another default would make any difference!!
Grocery Challenge August = 220 (in my dreams!!)
DMP support thread (member #32)

newlywed is offline
Reply With Quote Report Post
The Following User Says Thank You to newlywed For This Useful Post: Show me >>
# 9
noah271007
Old 15-04-2009, 9:40 AM
Serious MoneySaving Fan
 
Join Date: Jan 2009
Posts: 1,238
Default

Quote:
Originally Posted by newlywed View Post
Is it 6 years after it starts? or 6 years after you finish paying it off that it shows?

On a DMP so my rating is shot anyway - but suspect that the AP might stay there longer than the default notices, if it stays till it's paid off

That's why it makes me laugh when one of my creditors makes out they are doing me a favour by charging me a low interest rate and promising not to adversely effect my credit rating - with 2 defaults and an AP I don't think another default would make any difference!!
AP entry is on the payment history conduct of an account. If account remain open and active then it will drop off after 3 years in the case of Experian and 4 years with Equifax.
However if you settle an account with AP marker before it drops off, then the payment history conduct will be on view for lenders to see for 6 years!

Is it correct that lenders disgard any adverse data that are more than 6 years old when considering application?
noah271007 is offline
Reply With Quote Report Post
# 10
king100
Old 23-07-2010, 11:29 AM
Serious MoneySaving Fan
 
Join Date: Feb 2007
Location: Suffolk
Posts: 1,520
Default

Do they have to inform you legally that by accepting this that an arrangement to pay will be on your credit file?

And what is the legal definitation of arrangement to pay?
I all have learnt is from others on many sites.
Seek legal help if unsure.
Dont pay Private Parking tickets - they are mere invoices.

PRESS THANKS-------------}
king100 is offline
Reply With Quote Report Post
# 11
izools
Old 23-07-2010, 12:07 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: May 2008
Posts: 7,496
Default

Quote:
Originally Posted by noah271007 View Post
Hello guys!

I'm back from a long break, how have you all been? I hope no one have been missing me!

I will get the CRA's information updated as soon as possible, and start a new thread shortly. So Underground, just bear with me!

I have started a new thread on the subject of 'Arrangement to Pay' that some lenders report to CRA's.

AP has not been widely discussed so out of curiously, how damaging is AP on credit file? I know for a fact some lenders would accept payment plan to pay back debt like freezing purchase interest on account, but often do not discuss/inform to customer that accepting such plan would mean serious damage to their credit worthiness as a result.

Is it on par with one late payment or more?

Does it continue to affect credit worthiness for as long as 6 years?

I used to have several of them with 02, but they have removed the default and data off my credit files so i am lucky.
To set some facts straight about arrangements to pay:

Arrangements to Pay are the least damaging of all "adverse" data. They are almost on par with being late or in arrears but considered less damaging by lenders as the borrower has clearly addressed the situation and come to an agreeable solution with the lender, as opposed to blatantly violating the credit agreements.

Different lenders weight Arrangements to Pay very differently.

As an example, my mother has held a Barclaycard in an Arrangement to Pay for seven years. This is how it appears on her Experian and Equifax credit reports (respectively):




Since she has had the card in arrangement to pay, she has been instantly approved for the following accounts:

RBS Current account (Dec 2007)
RBS Mastercard, 2,200 Limit (May 2008)
RBS Mastercard, 3,000 Limit (June 2008)
Virgin Mobile Contract (December 2008)
Sygma Silver mastercard, 1,000 Limit (March 2010)
Sygma DAYS mastercard, 1,000 Limit (March 2010)
Sygma Creation Mastercard, 2,000 Limit (June 2010)
Orange Mobile and Home Broadband contracts (June 2010)

She has been instantly declined for the following accounts:

Egg Credit Card
Halifax Credit Card

She has been referred and subsequently declined for the following accounts:

Post Office Credit Card
MBNA Rate for Life special

As can be seen some lenders interpret AP's in a positive light, some in a neutral light, and some in a negative light.

As long as the rest of your credit profile is excellent an AP shouldn't stand in the way of all but the most stringent lenders - as has been bourne out in my Mother's case

One other thing that is important to note, is that some lenders report accounts that are in an AP differently.

As can be seen from the example - the Barclaycard was reported as paid on time and up to date whilst in an AP. However, my Provident loan was also in an AP, but concurrently reported as being in arrears:



Now... Provident don't report to Equifax. If they did, the account would not appear as in an AP whilst also being in arrears, rather the months would be marked with a "AP" marker and nothing else as the Barclaycard account was.

As you can assume the way Barclaycard report arrangements has a significantly less detrimental effect to the way Provident do. in regards to Experian, there are three ways to report an AP:

a. With the Arrangement marker and account in arrears (AKA Provident)
b. With the Arrangement marker and account status undisclosed (AKA Home Shop Direct Group)
c. With the Arrangement marker and account status paid up to date (AKA Barclaycard)

All three are acceptable ways of reporting AP's to Experian, as you can imagine the first way has a significantly more detrimental effect than the other two.

Equifax and Call Credit do not work like this, they allow the lender to report the account in an Arrangement or in arrears, not both so a lender who searches Equifax (I.e. sygma bank) would not be able to differentiate between the three ways of reporting, those that search Experian would.

Hope this helps!

EDIT: With Equifax, the AP statuses show for four years. Once the account has been out of an AP for four years there will be no record of it having been. Call credit, same but three years. Experian, the special instruction indicator will stay there for six from the date the account was settled. The status codes depend on whether the lender goes for option a, b, or c above, and are recorded for three years.

I have now raised a dispute with Experian and Provident re: getting the status codes amended, given that I stuck to the AP, and will let everyone know how I get on
Cashback Earned Nectar Points 68 Natoinwide Select 62 Aqua Reward 100 Amex Platinum 48

Last edited by izools; 23-07-2010 at 12:40 PM.
izools is offline
Reply With Quote Report Post
The Following 11 Users Say Thank You to izools For This Useful Post: Show me >>
# 12
Curt.
Old 23-07-2010, 10:58 PM
MoneySaving Stalwart
 
Join Date: Jul 2010
Posts: 364
Default

*Appluads*

Excellent post Izools, very insightful and you put a lot of information into something that most people get confused or worried about.

A credit to this site, my friend.
Curt. is offline
Reply With Quote Report Post
# 13
izools
Old 23-07-2010, 11:16 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: May 2008
Posts: 7,496
Default

Quote:
Originally Posted by Curt. View Post
*Appluads*

Excellent post Izools, very insightful and you put a lot of information into something that most people get confused or worried about.

A credit to this site, my friend.
Why thank you my good sir!

I am trying to become more accurate and less subjective with the advice I give save the void that our departed Niddy left, in the hope that either he comes back to help everyone else shouting me down or the advice is replaced with mine

I can but try
Cashback Earned Nectar Points 68 Natoinwide Select 62 Aqua Reward 100 Amex Platinum 48
izools is offline
Reply With Quote Report Post
# 14
pipsi
Old 24-07-2010, 12:38 AM
MoneySaving Stalwart
 
Join Date: Jul 2010
Posts: 236
Default

This really makes me angry, when i went to uni i was given a bursary on the condition that the student support/student financial aid office restructured all of my debts to a minimum monthly payment. I didn't want to as up until i went to uni as a mature student i'd always managed to pay my bills. However i had no choice if i wanted the bursary so i let them do it. They didn't tell me at the time that it would affect my credit rating. I have recently obtained my credit report from experian and equifax. On experian my CC which had this arrangement on back while i was at uni, is shown like any other CC debt which is up to date and it is shown as being about 60% of my credit limit. So it looks fine. On equifax however it shows years of AP markers from when it was in the arrangement. It is worth noting that i was not in arrears nor had i defaulted when the arrangement was made and it was done by the university without them explaining to me what the consequences would be. Is there anything i can do about this? I didn't realise it had such an adverse effect on my credit rating. If i had known then what i know now i wouldn't have let them rearrange all of my payments because it has caused me years of grief since leaving uni.
pipsi is offline
Reply With Quote Report Post
# 15
costaerer
Old 24-07-2010, 1:17 AM
MoneySaving Stalwart
 
Join Date: Jun 2009
Posts: 640
Default

Thank you izools
costaerer is offline
Reply With Quote Report Post
# 16
costaerer
Old 24-07-2010, 1:19 AM
MoneySaving Stalwart
 
Join Date: Jun 2009
Posts: 640
Default

I have AP on 1 out of 6 accounts on my credit file. Have managed to get cap 1 progress, orange mob contract and 3 shop direct accounts.
costaerer is offline
Reply With Quote Report Post
# 17
izools
Old 24-07-2010, 1:45 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: May 2008
Posts: 7,496
Default

Quote:
Originally Posted by pipsi View Post
This really makes me angry, when i went to uni i was given a bursary on the condition that the student support/student financial aid office restructured all of my debts to a minimum monthly payment. I didn't want to as up until i went to uni as a mature student i'd always managed to pay my bills. However i had no choice if i wanted the bursary so i let them do it. They didn't tell me at the time that it would affect my credit rating. I have recently obtained my credit report from experian and equifax. On experian my CC which had this arrangement on back while i was at uni, is shown like any other CC debt which is up to date and it is shown as being about 60% of my credit limit. So it looks fine. On equifax however it shows years of AP markers from when it was in the arrangement. It is worth noting that i was not in arrears nor had i defaulted when the arrangement was made and it was done by the university without them explaining to me what the consequences would be. Is there anything i can do about this? I didn't realise it had such an adverse effect on my credit rating. If i had known then what i know now i wouldn't have let them rearrange all of my payments because it has caused me years of grief since leaving uni.
Sue them. Plain and simple. Defamation of character.
Cashback Earned Nectar Points 68 Natoinwide Select 62 Aqua Reward 100 Amex Platinum 48
izools is offline
Reply With Quote Report Post
# 18
Dave Z
Old 24-07-2010, 3:59 PM
MoneySaving Convert
 
Join Date: Dec 2009
Location: Langley
Posts: 175
Default

This has got me a bit worried now. On my credit report i have the following;



The account is settled now and i don't recall ever having missed payments or any other issues with it. Can anyone shed some light on it? The rest of my report has lots of green circles so don't want this to ruin my chances of getting credit in future.
Dave Z is offline
Reply With Quote Report Post
# 19
izools
Old 24-07-2010, 4:08 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: May 2008
Posts: 7,496
Default

Quote:
Originally Posted by Dave Z View Post
This has got me a bit worried now. On my credit report i have the following;



The account is settled now and i don't recall ever having missed payments or any other issues with it. Can anyone shed some light on it? The rest of my report has lots of green circles so don't want this to ruin my chances of getting credit in future.
I'd be very surprised if that had any impact whatsoever.

It was only one month, and it was a long time ago. Most credit scoring systems only look at the last 36 months of data, but even if there was one month in arrears or one month in an AP it's very unlikely to affect your chances.

You can dispute the data by raising a Notice of Dispute with Experian and Equifax if you wish
Cashback Earned Nectar Points 68 Natoinwide Select 62 Aqua Reward 100 Amex Platinum 48
izools is offline
Reply With Quote Report Post
The Following 2 Users Say Thank You to izools For This Useful Post: Show me >>
# 20
derbyman2010
Old 25-07-2010, 8:44 PM
MoneySaving Newbie
 
Join Date: Jul 2010
Posts: 8
Default

Thank you for this information .

I ended up on a debt management programme (never, ever again!) and defaulted on my mobile phone contract (which will vanish next May) and got two arragements to pay with HSBC Card Services and Capital One. This are now both settled and won't be off my credit reports for another 4 years, but that's how it goes.

HOWEVER, NatWest (who I bank with) gave me a credit card with their typical APR AND I've got car insurance, home insurance, a mobile contract, home shopping account and laptop contract.

So, whilst an Arragement to Pay isn't brilliant, work hard and hopefully things will look up
derbyman2010 is offline
Reply With Quote Report Post
Reply

Bookmarks
 
 




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

 Forum Jump  

Contact Us - MoneySavingExpert.com - Archive - Privacy Statement - Top

Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

All times are GMT. The time now is 5:02 AM.

 Forum Jump  

Free MoneySaving Email

Top deals: Week of 26 November 2014

Get all this & more in MoneySavingExpert's weekly email full of guides, vouchers and Deals

GET THIS FREE WEEKLY EMAIL Full of deals, guides & it's spam free

Latest News & Blogs

Martin's Twitter Feed

profile

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.

MSE's Twitter Feed

profile
Always remember anyone can post on the MSE forums, so it can be very different from our opinion.
We use Skimlinks and other affiliated links in some of our boards, for some of our users.