Arrangement to Pay Barclays - Mortgage application

riesy82

I found lots of useful information on this forum and thought I would share my experience to help someone else, as I wish I had found out sooner.

I had a short spell of financial difficulty in 2010 after my partner left me with a young child and huge child care fee's, I continued to work as I thought about the future rather than being better off on benefits today, but struggled to pay my current mortgage bills and credit cards. I set up arrangements on my credit card to try and ensure I could make monthly payments rather than defaulting which I was advised was the best approach. As soon as my daughter when to school and I did not have to pay 700 a month in childcare I rectified it all, and paid all of my debts off in full in a very short period. However this seems worse than if I had gone bankrupt or had a default.

I applied for a mortgage this week with high credit ratings 989 on equifax and got turned down due to an arrangement to pay that was on my barclays account from 2010 when I was in short term financial difficulty, Barlcays continued to report this on my credit report until 2014 which means it would show up until 2020. If I had defaulted and not tried to ensure my debts were paid off in 2010 this would of been off my file in 2016 and I would not be having the problems I am now.

I found some interesting information on ICO about how you should not be penalised more than having a default, so I rang Barclays, I was bluntly told if they removed it from my report it would be committing fraud as they are telling factual information.

I read out the below extract to them taken from ICO, then she went off to speak to her college upon return she apologised gave me £50 in compensation for causing me upset and assured me all records would be removed from my credit report in 10 days. They are only allowed to report something for 6 years, as they started in 2010 the 6 years have passed and they should no longer report it.

Please make sure you take action and do not lose your chance of getting a house because you did the right thing when you were in trouble way back. Unfortunately the vendors I was buying the house from would not wait 10 days for me to be able to reapply for a mortgage.


"CRA Arrangements to pay - fairness of them registering a default

As stated in the old default guidance, where an arrangement to pay breaks down, a default may be filed when the total value of the arrears is equivalent to three monthly payments under the original terms. However, this should not result in the customer being placed in a worse position than someone who had made no effort to pay whatsoever.

Whether an individual has been left in a worse position or not is something that we will have to consider on a case by case basis. However where we feel that the arrangement to pay has left the individual in a worse position than someone who simply stopped paying, we would normally consider this to be unfair under the first principle and ask the lender to amend the default so that it was the same as if the individual had simply stopped making payments without entering the arrangement to pay."