citi agreeing to payment plan what will this do to my credit rating?

niknax2955

Hi

For about a month I have been calling CITI regarding getting a reduction on the APR on the credit card. They are sending me out a expenditure form to see what I can afford to pay each month and will freeze the interest. What will this do to my credit report and will this keep on my credit report for a long time even when I have paid off the whole amount.

Many thanks

CLAPTON

it will probably show on your credit report and if so will remain for 6 years and make getting further credit very very difficult if not impossible

niknax2955

Would you know what they would record on my credit report if they have suggested freezing the interest and agreeing to a montly amount. I have not defaulted on any payment, never been late. I just asked if I could have the interest amount reduced. I did not ask for the interest to be frozen so was slightly shocked they suggested this.

benoit

It will show that you have made a payment arrangement which 'may' give future lenders the message that you are experiencing financial difficulty. In other words it will make them wary of lending you anymore credit.

CLAPTON

an arrangement to pay is a default... you are not paying the 'contracted sum'
however they may just show an arrangement to pay and not actually default the a/c

niknax2955

sorry to ask so many questions...... but is an arrangement to pay just the same as a default? or having an arrangement to pay on my report better than a default. Also is the contracted sum the balance with interest. It is a squeeze making the repayments but as I say I have made them and I have also suspended the account and cut up the card. Do you think it is best to hold fire on the arrangement to pay and continue to ask for a reduction on the interest APR. At least they would be getting the interest and it not frozen.

speedbird1973

APs and defaults are seperate entities, you will have an AP marker on your file and they may default you as well. I have no idea for sure if an AP is better than a default - I'd guess it is? You're at least facing up to your problem.

izools

CLAPTON wrote: »

an arrangement to pay is a default... you are not paying the 'contracted sum'
however they may just show an arrangement to pay and not actually default the a/c

An arrangement to pay is not a default.

My mother has a Barclaycard account which she is paying at an agreed reduced rate with no interest having been applied since 2003 (it was a HUUUUUUUGE balance).

Since then, with the AP marker on her Barclaycard account (still active) she has been approved for:

RBS Current Account W/ £500 Overdraft & Cheque Guarantee - this started off with a cash card and no OD but they gave her these facilities after 90 days of good account conduct
2x RBS Mastercard accounts totalling £5,700 limits (13.9% APR) - after six + monts of good current account conduct, which helped
New mobile phone contract
Sygma Silver Mastercard with £1,000 limit (18.9% APR)
New BT line (moved from Virgin Cable)
British Gas Energy (they credit check now)

All of these accounts were instant approval as well, not referrals.

She has been declined for a Egg card and an MBNA card (although she already has an MBNA platinum plus so that may be why).

It will adverselt affect your credit rating but not as much as arrears or defaults or CCJs.

You should not have trouble with regard to utilities, bank accounts, and the like, but may have trouble or have to pay higher APRs on credit cards, loans, or mortgages.

CLAPTON

In general a AP is less bad than a default on your credit record.
However, it really depends upon the lender who will use the information from the credit records as they see fit.
Given that some lenders are drawing the line a few missed payments then an AP is pretty bad.

Is it likely to be a major problem for you... if you are hoping to get a mortgage or need a re-mortgage then an AP may create problems for you.

izools

CLAPTON wrote: »

In general a AP is less bad than a default on your credit record.
However, it really depends upon the lender who will use the information from the credit records as they see fit.
Given that some lenders are drawing the line a few missed payments then an AP is pretty bad.

Is it likely to be a major problem for you... if you are hoping to get a mortgage or need a re-mortgage then an AP may create problems for you.

My mother has been approved for a remortgage by RBS and that Welsh building society - I forget their name - oh that was it Principality - with her Barclaycard in an AP - she declined their offers as it was just before the base rate fell. They approved her at 4.9% just has their SVR was going to 3.9% or thereabouts. She will be re-applying to RBS again once she has another permanent job

As long as you 100% flawlessly stick to the AP, have lots of other accounts in excellent status, and wait a year after the AP marker has been applied before applying elsewhere, you shouldn't have too much grief, but it depends on the other strengths your applications have. Stable job? Lived at your address for a long time? No other adverse credit and other accounts run well? Good income? Won't be too much of a problem but if it's your only credit card or your income isn't much more than your debt then it will be a bigger problem.

Ask yourself how does it look as part of the bigger picture. If it's a tiny piece (my mother has 10 active accounts and 11 closed accounts, none with missed payments, some open since 1983 without a single missed payment and she hasn't moved in over 20 years) of a overall big, stable, green picture, then this is how the creditors will see it.

If however it is part of a generally unstable picture, i.e. few other accounts, poor account conduct elsewhere, having moved house / job / bank recently, etc, again this is how the creditor will see it and it will have more of an impact

niknax2955

Thank you that is really interesting izools. I am hoping to sell my property and move in with my partner, so will clear the CITI Card hopefully in the next 6 - 9 months, depending on selling my house. I have a really stable job and have been in my job for 20 years. I have other debt but have never missed a payment on any of my credit cards, mortgage etc etc. I have just overspent and am finding it a squeeze to pay citi repayment, but with the equity from my house, it would clear all my debts.

Do I have to make sure that it is an AP they have flagged on the account?





I am just concerned that