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  • FIRST POST
    • missy.1
    • By missy.1 11th Apr 17, 11:27 AM
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    missy.1
    Impact of AR (Arrangement to Pay) on Credit file
    • #1
    • 11th Apr 17, 11:27 AM
    Impact of AR (Arrangement to Pay) on Credit file 11th Apr 17 at 11:27 AM
    Good Morning all,

    I have not used this forum in ages, so I hope that I am posting in the right place!

    About two years ago I started to 'clear up' my credit file and I have successfully repaid / removed four defaults and removed one unfair CCJ. Only one of these defaults appears on my credit file with Experian, the others have been removed or don't appear on Equifax or Callcredit.

    I am now down to my last two accounts which need clearing. Both are payday loans with balances of £200 and £1500. I am in the position to clear both of these accounts by the end of May. They are currently appearing on my credit file with Experian and Equifax as 'AR' / Arrangement to repay.

    My question is, will my credit file / score increase drastically once I've cleared the balance in full . Or, will the former AR status still reflect negatively on me for prospective lenders in the future?
Page 1
    • zx81
    • By zx81 11th Apr 17, 11:28 AM
    • 14,851 Posts
    • 15,666 Thanks
    zx81
    • #2
    • 11th Apr 17, 11:28 AM
    • #2
    • 11th Apr 17, 11:28 AM
    Lenders will view you more positively once the arrangement has ended, and your file will improve the older it gets.

    However, it's not as good as not having the arrangement on there at all.
    • missy.1
    • By missy.1 11th Apr 17, 2:39 PM
    • 4 Posts
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    missy.1
    • #3
    • 11th Apr 17, 2:39 PM
    • #3
    • 11th Apr 17, 2:39 PM
    Thank you for the response.

    I am guessing the more the higher the account balance, the worst this will be viewed by prospective lenders?

    Once I've repaid the loans I will update this thread with the outcome.
    • 20aday
    • By 20aday 11th Apr 17, 5:18 PM
    • 2,105 Posts
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    20aday
    • #4
    • 11th Apr 17, 5:18 PM
    • #4
    • 11th Apr 17, 5:18 PM
    As someone who once had AR markers on their credit reports (Capital One, HSBC) I did find some lenders wouldn't touch me with a barge pole (fair enough) and those that did tended to offer me lower credit limits with higher APRs.

    As zx81 points out, in time, the effect of these has less of an impact but it's worth bearing in mind that even when the accounts are closed they'll still show on your credit reports for a further six years.

    There is another thread elsewhere in the credit ratings forum about Barclaycard AR removal (successful) which I used around two-three years ago; followed the advice in there and managed to get them removed around six months before they would have fallen off anyway.
    It's not your credit score that counts, it's your credit history. Any replies are my own personal opinion and not a representation of my employer.
    • sourcrates
    • By sourcrates 11th Apr 17, 9:26 PM
    • 13,034 Posts
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    sourcrates
    • #5
    • 11th Apr 17, 9:26 PM
    • #5
    • 11th Apr 17, 9:26 PM
    AP markers should be banned, as they effect your credit file for a further 6 years after you have repaid the debt.

    We always advise people entering a DMP to try and get all there accounts defaulted first, that way you don't risk AP markers.

    It's surprising how many people are unaware of this.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • Tarambor
    • By Tarambor 11th Apr 17, 9:45 PM
    • 1,927 Posts
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    Tarambor
    • #6
    • 11th Apr 17, 9:45 PM
    • #6
    • 11th Apr 17, 9:45 PM
    AP markers should be banned, as they effect your credit file for a further 6 years after you have repaid the debt.
    .
    Originally posted by sourcrates
    No, they only affect your file for a further 6 years after the last reduced payment. When you resume normal repayments then you no longer get them, Good. When you make an arrangement to pay you are welching on the agreement, the contract you made when you were quite happy to take someone else's money and you deserve to have a price to pay as a result of that. Without it there's nothing to stop people signing up to all kinds of loans and just thinking sod it, I'll just pay what I've decided I want to because there's no consequences for no longer continuing to pay what I signed up to every month.
    • jimlev
    • By jimlev 8th Jan 18, 2:49 AM
    • 3 Posts
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    jimlev
    • #7
    • 8th Jan 18, 2:49 AM
    • #7
    • 8th Jan 18, 2:49 AM
    When you resume normal repayments then you no longer get them
    Originally posted by Tarambor
    What if you are given an arrangement after asking for an interest freeze but then, one working day later before any payments are due, you ask to revert to contract?
    • SeanG79
    • By SeanG79 8th Jan 18, 11:50 AM
    • 859 Posts
    • 381 Thanks
    SeanG79
    • #8
    • 8th Jan 18, 11:50 AM
    • #8
    • 8th Jan 18, 11:50 AM
    AR/AP markers are treated the same way as a default when it comes to underwriting. As mentioned above, when entering DMPs, it is better to get a default as opposed to a AP/AR marker as the default wont show after 6 years of the default date, but an AP/AR marker shows up to 6 years after the final payment is made.
    • Carrot007
    • By Carrot007 8th Jan 18, 11:55 AM
    • 819 Posts
    • 689 Thanks
    Carrot007
    • #9
    • 8th Jan 18, 11:55 AM
    • #9
    • 8th Jan 18, 11:55 AM
    No, they only affect your file for a further 6 years after the last reduced payment. When you resume normal repayments then you no longer get them, Good. When you make an arrangement to pay you are welching on the agreement, the contract you made when you were quite happy to take someone else's money and you deserve to have a price to pay as a result of that. Without it there's nothing to stop people signing up to all kinds of loans and just thinking sod it, I'll just pay what I've decided I want to because there's no consequences for no longer continuing to pay what I signed up to every month.
    Originally posted by Tarambor
    No, it's 6 years in this case as they are paying them off and closing the account.

    That way the history is kept for 6 years after closure and does not change or roll off the way a still open account does.
    • sourcrates
    • By sourcrates 8th Jan 18, 2:48 PM
    • 13,034 Posts
    • 12,342 Thanks
    sourcrates
    No, they only affect your file for a further 6 years after the last reduced payment. When you resume normal repayments then you no longer get them, Good. When you make an arrangement to pay you are welching on the agreement, the contract you made when you were quite happy to take someone else's money and you deserve to have a price to pay as a result of that. Without it there's nothing to stop people signing up to all kinds of loans and just thinking sod it, I'll just pay what I've decided I want to because there's no consequences for no longer continuing to pay what I signed up to every month.
    Originally posted by Tarambor
    Please check your information before posting inaccurate advice.

    For the avoidance of doubt if you have a credit account which displays an ‘AR’ or "AP" marker it can remain on your credit file for 6 years from when the account is closed.

    Info on AP markers :

    https://www.checkmyfile.com/articles/2871/credit-reports/arrangement-to-pay-markers.htm
    Last edited by sourcrates; 10-01-2018 at 8:12 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
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