Arrangement to Pay - drop off after date of last payment, or date account was closed?

HWBY

Hi all,

My wife and I have hit a conundrum. We wanted to start looking at mortgages last year, so have been doing a review of our credit scores and reports. My wife found out she has an Arrangement to Pay recorded with Lloyds bank, between May 2014 and February 2016, that appear on reports from Equifax and TransUnion. We do know about paying Lloyds money - she was 20 and in a tough spot, opened a student account with the bank in September 2013 and drained the overdraft, subsequently not using the account again. Lloyds got in touch wanting it back in May 2015, she couldn't afford it all at once, but set up what she thought was a normal payment plan. She had no idea that this was actually an "Arrangement to Pay", and something that would remain on her credit report. In February they got in touch again wanting higher monthly payments that she couldn't afford, so I gave her the lump sum, and it was all paid off that month. She asked Lloyds to close the account.

Nearly three years later, in October 2018, she learnt that the account had in fact not been closed, and after a long process of complaining got it closed and a token £50 apology. It now appears as 'Settled/closed' on the credit report from that date.

My primary question is, when will this Arrangement to Pay fall off the report? I'm very confused over whether it's from the date of the last payment, so from February 2022 it will just show a Lloyds account with no problems, or from the date of account closure, so until October 2024 the report will show a Lloyds account that at one time had an Arrangement to Pay.

Secondarily, do we have any real options here in getting it removed or amended? Perhaps asking to change it to a default from May 2014, which would mean it would drop off next month? She didn't have what this 'payment plan' actually entailed, nor what the implications would be for her credit, but that's a "he said, she said" situation with no proof. Or perhaps asking for the date of account closure to be changed to the original date she asked the account to be closed, February 2016, but again we have no proof of that.

I'd appreciate any help, as I can't find a firm answer on the date that an Arrangement to Pay will leave a credit report. She's understandably very upset and angry with herself, and the idea of having a mistake she made at 20 having an impact at 30 is having a toll.

Willing2Learn

An arrangement to pay is the worst option as the toxic data stays on your credit files for much longer.  The guidance says an account should be defaulted once it was 3-6 months arrears of your original agreement.  Ask the creditor to default the account, backdated to when the account was 3-6 months in arrears.

Please see the guidance linked below, paying particular attention to principals 3 & 4:
http://www.scoronline.co.uk/sites/default/files/high_level_prinicples_document_final.pdf

HWBY

Willing2Learn said:

An arrangement to pay is the worst option as the toxic data stays on your credit files for much longer.  The guidance says an account should be defaulted once it was 3-6 months arrears of your original agreement.  Ask the creditor to default the account, backdated to when the account was 3-6 months in arrears.

Please see the guidance linked below, paying particular attention to principals 3 & 4:

Thanks for the link to that document. We realise now that an Arrangement to Pay really was the worst option, but at the time she didn't even know it was something that would appear on a credit report - she believed it to just be a payment plan. She wanted to do the right thing and pay it off! Of course, if in May 2014 she just told them she had no intention of paying and letting it default, it would be gone next month... what a bizarre system that punishes people for paying their debt.

She's having trouble getting through to the bank due to the current situation, but once she manages it we're going to try getting a default dated to 2014. I'm not sure from what date it was 'in arrears', as she never went over the overdraft limit, she just drained the overdraft and then never used the account, in violation of the T&C.