Help getting AR removed by Scottish Power

anonmortgageposter

Hi, 

I had a complaint open with Scottish Power back in 2020. While the complaint was open we both agreed I wouldn’t be paying anything until it was resolved. 

When it was resolved I was 3k in debt to them. I was told I could pay this back monthly with no interest and it would not affect my credit file.

I have since moved property and I pay £51 per month back and have done since Feb 2022 and have never missed a payment and as promised by then it has never effected my credit file.

Fast forward to tonight and I’ve noticed they’ve started reporting this as an AR on my credit file.

I am looking to do a further advance in the next few months and worried this will affect my ability to do so on my current mortgage which is joint in my husbands name. 

There is roughly £1500 left on this. Could I please have advice on the best way to have this removed. I read on another thread that someone successfully had these removed by pointing out these are more harmful than what a default would have been due to a default falling off quicker.

if I done this, when would the default effectively start as they never issued me a default letter and had they mentioned anything like this then I would have paid it off right away. 

Should I pay off the £1500 first and then start the process of having it removed?

I understand from advice given that this could potentially be now reporting correctly. My argument is that I was never issued anything stating I had defaulted and I was allowed to pay this back without it effecting my credit which is now has. 

The strange part is it is only reporting from April this year and not from any other date? The payments started back in Febuary 2022?

Any advice of how to progress with this would be greatly appreciated.

EDIT - I must add to this, the amount of debt was never lowered. I didn’t enter into an agreement to pay any less back, I am paying back the full amount which was owed. 

anonmortgageposter

My main argument here is I was told this would not affect my credit file. This was an Energy bill so different from a credit card agreement or loan.

They were more than happy for me not to pay until the complaint was resolved. They failed to contact me back constantly to resolved the complain and I had to chase them up every time. They never once explained I could default if I didn’t pay the just agreed I wouldn’t be paying until I had the complaint resolved.

Will they still have a call from back in 2020? That way I can have it listened to where they tell me it won’t effect my credit file.  

MattMattMattUK

anonmortgageposter said:

I must add to this, the amount of debt was never lowered. I didn’t enter into an agreement to pay any less back, I am paying back the full amount which was owed. 

I read your other thread and you will not be able to get this AP marker removed as it is accurate. An agreement to pay marker does not mean you are paying less than the full amount back, it means you are not paying in line with the original contractual terms. They do not need to issue you anything saying you defaulted and indeed you may not have defaulted, but this is an AP marker not a default marker anyway.

You are not paying back in line with the original contractual terms therefor you have an agreement to pay in place and so the AP market is correct and cannot be removed. The reason for the comments on AP vs default, a default is more harmful in the short term but falls off your credit report after six years from the date of default, where as an AP market falls off six years after the last payment. A defaulted account can also have the benefit of having no interest charged on it.

For clarity you will not be able to have this removed, it is factually correct and the energy supplier and the CRA are required to report factually.

The best course or action is to clear it as soon as possible, it will then show as settled in full and future lenders will be less bothered by it. In the short term it will have an impact, how much no one can say, that might range from a straight no to additional borrowing to offering it but at a higher interest rate than would otherwise have been offered.

What would be the amount and purpose of the additional mortgage borrowing?

anonmortgageposter

Thanks for the Reply, Matt. So what is the process for the AR.

If I call and pay the £1500 balance. Will this fall off 6 months after the last payment or 6 years? 

I’m not sure if your comment stating six months was a mistake. However, it’s got me hopeful!

It’s a joint mortgage and around 55k further advance taking mortgage to 300k on a house valued at 360-380k

anonmortgageposter

This is how it shows. £0 initial balance and £0 defaulted balance? 

MattMattMattUK

anonmortgageposter said:

Thanks for the Reply, Matt. So what is the process for the AR.

If I call and pay the £1500 balance. Will this fall off 6 months after the last payment or 6 years? 

It will fall off after six years.

anonmortgageposter said:

I’m not sure if your comment stating six months was a mistake. However, it’s got me hopeful!

Sorry, it was a mental typo, it will be six years before it falls off your credit report, the same as everything else. Corrected now for clarity.

anonmortgageposter said: 

It’s a joint mortgage and around 55k further advance taking mortgage to 300k on a house valued at 360-380k

That would potentially take you above 80% LTV anyway which is going to have both interest rate implications and lenders are not always a fan of additional borrowing at that level. Do you and your husband have any other debts as they would have to be factored in? What is the additional borrowing for?

MattMattMattUK

anonmortgageposter said:

This is how it shows. £0 initial balance and £0 defaulted balance? 

It is not defaulted, just an agreement to pay.

anonmortgageposter

Apologies, I’m on my mobile and I can’t seem to reply directly to your comment.

Why would it start reporting now after over 2 years? Should I take the hit pay it off and be happy it only shows from April-August this year ? Would this potentially not look so bad given it’s only a few months? 

It is to pay off renovation works we did on the property. I know people say don’t put unsecured into secured debt, however, it’s brings our payments down to a manageable amount with me going on statutory maternity pay. 

MattMattMattUK

anonmortgageposter said:

Apologies, I’m on my mobile and I can’t seem to reply directly to your comment.

Why would it start reporting now after over 2 years?

No idea, but it could be they have finally caught up with reporting.

anonmortgageposter said:

Should I take the hit pay it off and be happy it only shows from April-August this year ? Would this potentially not look so bad given it’s only a few months? 

It will look better because it is fully paid rather than outstanding.

anonmortgageposter said:

It is to pay off renovation works we did on the property. I know people say don’t put unsecured into secured debt, however, it’s brings our payments down to a manageable amount with me going on statutory maternity pay. 

People generally do yes.

Your biggest issue is that the lender has to factor in the additional borrowing on top of your existing debt, if you add the two debts together you would basically be in a zero equity position and the bank will not agree to that. I would strongly advise you speak to an independent broker about this, but I suspect that that you will not be able to borrow the additional money even without the AP marker.