An Arrangement To Pay is recorded on your credit report when the lender agrees for a short while to take lower payments than those that are due contractually under the Credit Agreement.
The impact of an Arrangement to Pay on your credit rating varies depending on the attitude of lenders. Some lenders view an Arrangement to Pay similarly to a default, as they regard it as a fundamental inability to pay debts as they fall due (which is one of the definitions of bankruptcy).
Other lenders take a much more relaxed view about an Arrangement to Pay. They would prefer to receive less than expected rather than nothing at all, and they see the approach by their customer to ask for time to pay as a proactive and positive step, and not one that should be penalised.
An Arrangement to Pay stays on your credit report for six years and can seriously impact your ability to get credit.
An Arrangement to Pay is signified on a credit report in the monthly status codes as ‘AR’.
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