Informal agreement stays on my credit history for 11 ELEVEN years!

geordiebri_2

First post!

I've managed to get one of my CC's to agree to freeze interest on my a/c, and allow me to pay the outstanding balance over five years.

I was paying around £220/month, but with the astronomical interest, the balance was reducing by around £20. Yes, that's right. In fact, some months, the balance went up. Perhaps no surprises to some on here, needless to say I'd had enough.

So now I'll be paying £110/month, and reducing the balance by £110.

The catch? This arrangement stays on my credit file for 11 years.

Is this a good idea? What kind of damage can this information do in the future? Is there anything I can do about it?

izools

My mother held a Barclaycard account in an Arrangement to Pay from June 2003 until June 2010. She closed and settled the account last month.

This account shows as closed and settled with a £NIL balance on her file as of a couple of weeks ago.

She has, in the last 12 months, been approved for:

First Direct current account, £500 interest free OD
First Direct credit card, £1,500 credit card
Creation mastercard £2,000 limit
Black Horse car loan £3,000
and most recently - just last week

SAGA Visa credit card 11.9% APR £3,600 limit

So once it's closed and settled as long as you miss NO PAYMENTS on ANY of your accounts, EVER, you should be good to go

simax

Well 11 years would be right in theory, as the account will still show for 6 years after it's settled. However you could request that once it's settled in full that is just shows settled in the history.... Worth a shot. Then there would only be 5 years damage....

Xbigman

Alternatively you could stop whining and be gratefull you're not paying £200 a month in interest anymore and realize the big let off you've just had.
I'd have thought that you'd not want any new credit given your current problems.





X

Clive_Woody

izools wrote: »

My mother held a Barclaycard account in an Arrangement to Pay from June 2003 until June 2010. She closed and settled the account last month.

This account shows as closed and settled with a £NIL balance on her file as of a couple of weeks ago.

She has, in the last 12 months, been approved for:

First Direct current account, £500 interest free OD
First Direct credit card, £1,500 credit card
Creation mastercard £2,000 limit
Black Horse car loan £3,000
and most recently - just last week

SAGA Visa credit card 11.9% APR £3,600 limit

So once it's closed and settled as long as you miss NO PAYMENTS on ANY of your accounts, EVER, you should be good to go

I'm sorry but...."Out of the frying pan into the fire"....

savagej

Bankrupty would stay on your file for less time and have the same impact as an arrangement to pay, sad but true.

nottoolate

savagej wrote: »

Bankrupty would stay on your file for less time and have the same impact as an arrangement to pay, sad but true.

its utterly mad that people who make a long term commitment to pay back end up worse off than someone who doesnt

savagej

I agree.

In another thread on the issue I put forward the idea of having a default marked the same as a properly settled account (i.e. no mention of the account ever having been in default) once paid not marked as satisfied , which again is as bad as an informal agreement etc..

However, no one seemed to want to stick up for the idea, or expect it would act as an incentive to those who can pay and got it through no fault of their own such as redundancy who say managed to get a new job. Why blacklist someone in that position for 6 years, surely they are the customers that a high street lender would want someone who is responsible with their money and meets their commitments. Currently, there is absolutely no incentive to repay on a default as it is a case of you are "damned if you do and damned if you dont" and lets companies like Provident make a fortune on the back of the unfortunate. You might as well just declare yourself bankrupt and lose all of your debt in the one go, if you have few assests.

Such a scenario would also mean that those who are unable to afford to repay their defaults are seen as unable to afford credit and therefore "rightly" denied more (but incentivised to repay it), or seen as having decided not to repay it.

savagej

People in this country who commit some criminal offences are treated more leniently than someone who defaults on a contract under which they owe money. Both in the courts and in terms of the Rehabilitation of Offenders Act 1973.

Perhaps we need a Rehabilitation of Debtors Act to stop people being bunched together and put in "debtor jail" for 6 years irregardless of the circumstances that led to their contractual default.

izools

Clive_Woody wrote: »

I'm sorry but...."Out of the frying pan into the fire"....

Err, not really, mother owes £4000 where in 2003 she owed over £25K.

She has paid off and closed her Creation card now and shifted the rest of her debt on to the Saga card @0% for 9 months leading to 11.9% APR.

Don't judge what you don't know. She's very savvy with money now and is paying off her debt at a record rate; with minimal interest along the way. She's incurred no additional debt other than that caused by interest since putting her Barclaycard into an AP all those years ago - bar that required for a new car due to her being disabled and the head gasket going unexpectedly on her old banger. But that's half paid off already after only six months.

She ain't stupid

izools

savagej wrote: »

Bankrupty would stay on your file for less time and have the same impact as an arrangement to pay, sad but true.

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

Jesus christ mate you don't half spout some tripe sometimes!

AP makes hardly any difference to your credit worthiness! It would prevent the applicant from getting the best-of-the-best deals for sure, but certainly wouldn't prevent things like bank accounts, mobile phones, sub prime to mediocre credit cards, and the like going through - if there is no other adverse.

If AP is just as bad as Bankruptcy why was my mother approved for... a total of... FIVE 0% cards over the course of the seven years her Barclaycard was in an AP? Not all at once of course, just to tart other balances.