Arrangement to Pay - Removal Advice

fisherja84

Hi,

I have an overdraft facility with Barclays on an account that I had not been using. In order to reduce my debt, I asked if we could arrange for the overdraft to be reduced automatically over 6 months. Barclays agreed to a reduction at approximately £700/ month.

I didn’t think anything of it however I just got rejected for a mortgage and checked my credit file and I see a AR marking on my credit file for the last two months.

This seems to have massive implications - I dit not “fail to meet my credit obligations”, I volunteered this arrangement and now I am being treated by creditors as if I have been missing payments.

i will have this paid off over a period of 6 months.

Does anyone have any experience of getting these removed from a credit file. I am furious as I took responsible action to reduce my debt and not it’s massively impacting my mortgage eligibility.

eskbanker

fisherja84 said:

I have an overdraft facility with Barclays on an account that I had not been using. In order to reduce my debt, I asked if we could arrange for the overdraft to be reduced automatically over 6 months. Barclays agreed to a reduction at approximately £700/ month.

[...]

i will have this paid off over a period of 6 months.

Did you actually owe them £4200 or just have an unused overdraft facility of that amount (and wanted to reduce your available credit)?

If the former, how/when were you expected/obliged to repay it, if you felt the need to come to some sort of agreement with Barclays rather than just paying it off gradually at your own pace?

fisherja84

I had an overdraft facility but as the account was “inactive” - Nothing going in / out Barclays called me to tell me they were withdrawing the overdraft and asked me to pay the balance. I basically opened the account, maxed out the overdraft and then never used again for some time. 

kimwp

fisherja84 said:

I had an overdraft facility but as the account was “inactive” - Nothing going in / out Barclays called me to tell me they were withdrawing the overdraft and asked me to pay the balance. I basically opened the account, maxed out the overdraft and then never used again for some time. 

Ok, this is slightly different from how you described it in your first post. This means that Barclays asked you to pay off the overdraft (in one go) and you made an arrangement to pay it off in smaller chunks. So I think from this description, the arrangement to pay marking on your credit report is appropriate, but maybe if they didn't explain the consequences, you might have cause for complaint. Did you tell them you couldn't pay it off in one go?

CliveOfIndia

fisherja84 said:

I had an overdraft facility but as the account was “inactive” - Nothing going in / out Barclays called me to tell me they were withdrawing the overdraft and asked me to pay the balance. I basically opened the account, maxed out the overdraft and then never used again for some time. 

Please can you clarify the situation?  Because this statement is at odds with your original statement:

fisherja84 said:

I have an overdraft facility with Barclays on an account that I had not been using.

If you did indeed have a debt in the form of an overdraft, and negotiated a payment plan that was lower than the contractual requirement (which could have been Barclays asking you to repay it in full immediately), the AR marker is a true reflection of the facts.

This is one reason why regular use of an overdraft is often advised against on these forums - any bank is within its rights to withdraw the facility and demand immediate repayment at any time.

eskbanker

fisherja84 said:

I had an overdraft facility but as the account was “inactive” - Nothing going in / out Barclays called me to tell me they were withdrawing the overdraft and asked me to pay the balance. I basically opened the account, maxed out the overdraft and then never used again for some time. 

It's hardly surprising that they withdrew the facility and demanded immediate repayment of the debt then!

As above, it sounds like the conversation was effectively:

Barclays: please repay your overdraft debt immediately
You: I can't afford to do that, can we agree a payment plan?
Barclays: OK, we'll agree an arrangement to pay over six months

and they then updated your credit files in accordance with that, so these now appear to reflect an accurate picture of events.

fisherja84

I am not questioning the validity of them removing the overdraft - The issue I have is that the AR markers on my credit file, according to mortgage lenders is just as bad as a default or a CCJ - No one will touch you for 6 years. My credit file was flawless, had I knows the implications I would have made alternative arrangements to settle the overdraft.

it’s a fairly straightforward situation - Bank withdraws overdraft (perfectly reasonable) I ask, can I pay it off over 6 months (also perfectly reasonable) and now my credit file is absolutely ruined when I’ve never missed a payment in my life. 

 My credit rating had dropped to 702 and no lender will touch me with the AR markings on my account.

MorningcoffeeIV

To be fair, your credit file was already far from flawless with you being stuck in a massive OD for many months. You could ask if they will remove, but the markers are accurate.

Use a decent broker to place your mortgage - one who is used to dealing with adverse credit. It's not true that no one will touch you for 6 years.

kimwp

The point is that asking to pay over a period of time rather than immediately as requested is a situation where an arrangement to pay marker applies.

I'm not familiar with how to get markers removed, but I think your only hope is a complaint to the bank that you were led to believe that there would be no negative effect. 

CliveOfIndia

fisherja84 said:

The issue I have is that the AR markers on my credit file

Why do you have an issue with this ?  If the facts are - as has been surmised a couple of time already - that they requested immediate repayment of the overdraft and you entered into a repayment plan rather than paying it immediately, then the AR marker is nothing more than an accurate record of the facts.

fisherja84 said:

 My credit rating had dropped to 702 and no lender will touch me with the AR markings on my account.

Two points here.  Firstly, your score is meaningless, so you can safely ignore that.

Secondly, having an AR market is, undoubtedly, less than ideal.  However, it's not the end of the world, and a decent mortgage broker should be able to help you.  Granted, you may find you struggle to be accepted for the cream-of-the-crop deals, but there's no reason why an AR marker, in isolation, should curtail your chances completely.

eskbanker

fisherja84 said:

it’s a fairly straightforward situation - Bank withdraws overdraft (perfectly reasonable) I ask, can I pay it off over 6 months (also perfectly reasonable) and now my credit file is absolutely ruined when I’ve never missed a payment in my life. 

Until you missed the immediate repayment to Barclays!  No reason to doubt your perspective that you hadn't understood what that entailed, but the fact remains that the marker is an accurate reflection of what transpired.