Mortgage Arrears - Credit File

davidm29

Hi all, as stated in the other thread, I've had a very sketchy few years payment wise and we clung on to our house by our fingertips during the worst times. That said, we're on the right path now and have been for a while. I'm trying to sort my credit and noticed my mortgage is showing as missed payment, every month for the last few years. I rang the mortgage co today (Lloyds) to ask why and they stated because there are arrears on the account, it will show as a missed payment every moth until they're cleared. Is this right?

It doesn't feel completely fair if i'm honest, we have an arrangement with them to clear the arrears and have stuck to it like glue. We haven't 'missed' a payment for some time now.

Any advice on this at all? Or do we just have to accept our credit will be hammered until the arrears are cleared, despite us making payments on time every month.

Any guidance appreciated.

Thanks!

magpies79

When I was in arrears with mine due to ongoing divorce I believe It was marked as missed or AP arrangement to pay until I caught up regardless if I made every payment on time there after as i was behind and I made an arrangement to pay extra to clear the arrears are you doing anything about the arrears? 

Sorry seen you said you have an arrangement to pay in place so until the account is out of arrears that’s how it’s marked a friend of mine has a similar issue as you he went onto interest only for 6 months to clear the arrears while the payments were lower

obviously this is likely to increase your monthly payments further down the line or you’ll have to catch up with overpayments but it did help him with getting out of the arrears and his credit file not being reported for missed payments 

Hoenir

davidm29 said:

Any advice on this at all? Or do we just have to accept our credit will be hammered until the arrears are cleared, despite us making payments on time every month.

The information on your credit file would be worthless to other financial institutions if if it was not factually correct.  The key issue is that you failed to meet contractual obligations that you signed up to. 

Is there anyway you can find a few extra pounds every month to help bring your account back up todate quicker. The power to correct the situation is entirely in your hands. Arrears can take a long time to clear as interest costs rapidly mount up.

davidm29

thanks for the replies, i really appreciate it. The mortgage co have offered me 'capitalisation', apparently if i take it, i'll no longer be in arrears and my payments will show as on time again.

Something I need to understand more about but it sounds like it may be a good option to take.

magpies79

So I believe this is them adding the arrears back into your mortgage and recalculating your payments sure someone will correct me if I’m wrong which as you said will get you out of arrears and stop the missed payments being reported as missed 

Nofinway

davidm29 said:

thanks for the replies, i really appreciate it. The mortgage co have offered me 'capitalisation', apparently if i take it, i'll no longer be in arrears and my payments will show as on time again.

Something I need to understand more about but it sounds like it may be a good option to take.

Hi David
I would suggest that taking their offer of capitalising the arrears is a good idea. It will mean you are no longer showing as being in arrears anymore and is recognition of your good, recent payment history. It will mean they have to recalculate your monthly payments to ensure the balance is paid within the contracted term but often that is less than the amount you are paying to clear the arrears anyway so all good.
Good job!