What counts as adverse credit - AP markers?

Something_Witty

Does anyone know if past Arrangement to Pay markers are classed as late or missed payments for credit scoring purposes? I'm specifically thinking of AP markers on a credit card from over 1 year ago at time of mortgage application, the account is still open and active and paid in full each month.

Would this alone negate high street lenders as an option and mean adverse credit/subprime mortgage lending is the only way to go? Deposit would be in region of 20%.

Thanks to anyone in the know.

Thrugelmir

AP is normally entered into when the debtor is unable to the arrears owing. So would be viewed far worse than a late or missed payment. AP suggests that finances are stretched.

None of which augers well for a commitment which will require around 300 monthly payments to be made on time.

Having said that depends on the extent on the issues and the amounts involved. As to the impact.

Something_Witty

So to answer my question, does one CC account that was historically in an AP mean I could access subprime lenders only?

Dave_Ham

It will depend wholly on the rest of the case and lender selection. You should consider having a chat with an experienced broker, as potentially this could still be some mainstream lenders.

Obviously I am working on the assumption that the AP does not have a default date and was for a short period of time as AP and defaults usually go hand in hand?

Deposit as a % will also play a part and clearly the 5% deposit schemes will be unachievable.

An AP marker hits harder than a missed payment on a credit score, but not as hard as a default.

Something_Witty

There is no default date, AP markets date from a year ago, the credit card is still open & active and paid in full every month over the past year. However the account was in AP for over 2 years continuously (Barclaycard - they seem to be notorious for this!).

No debt - credit cards paid in full each month
No other issues on credit report
Deposit of 20%
Asking for mortgage of 2.5 - 3 x joint income.

i've looked at many bank's lending criteria and there is no mention of AP at all so makes it hard to know whether to even bother aiming for a mortgage...

Dave_Ham

I would say that you have a fair chance given the details provided. Will not be for all lenders though, so be aware..

Good luck

Thrugelmir

Something_Witty wrote: »

i've looked at many bank's lending criteria and there is no mention of AP at all so makes it hard to know whether to even bother aiming for a mortgage...

Where's the deposit coming from? As to go from a payment plan to a 20% deposit in 12 months is something that would be considered at the underwriting stage.