Arrangement to Pay markers

Posted by Ben Ryland in Credit Reports on 20 February 2018 - Ben is a Senior Credit Analyst at checkmyfile.

Have you seen an ‘AR’ mark on your credit file? Chances are you might glance at the letters and assume that they relate to payment arrears. In fact, on many credit file providers’ reports if you see an ‘AR’ appearing in the payment history of an account, this means an arrangement to pay has been recorded on the account.

Find out about the other types of markers that can appear on your file

An arrangement to pay marker (shown as ‘AR’) shows that the lender has agreeing to take a reduced monthly payment than originally set out in the credit agreement.

This arrangement to make reduced payments is often a short term solution, until the borrower can make the full payments again and clear any arrears which may accrue as a result of the arrangement. These are similar yet different to mortgage payment holidays, which do not appear on your credit report.

The effects of an AR marker

If an arrangement is in place, that means that payments are being made, however lenders may view it as a sign that you are unable to keep up with your payment agreements, so an arrangement to pay’s impact on your credit file can be severe. This type of marker does tend to have a negative impact on the credit score and rating.

That means any mortgage, loan or finance applications you make may be adversely affected by the presence of an ‘AR’ marker.

Each lender has their own criteria about what they are willing to accept on your credit file when you make an application. As they’ll need to run a credit check before they decide to offer any credit to you, every lender will be able to see this arrangement to pay marker, but it is up to them if they decide to accept your application with this information in mind.

In the most extreme cases, an arrangement to pay can be viewed as negatively as a default mark. As the borrower is unable to fulfil the agreed repayment of the debt when it falls due, this is similar to where an account can go into default. On the other hand, a lender may take the view that a payment (although reduced) is being made regularly as part of the arrangement and would not take as severe a view of the arrangement to pay history, however this would be at the lender’s discretion.

How long will AR markers stay on my file?

Like most other forms of negative information on your credit file, it will remain for 6 years from the date of the last “AR” payment marker. If you do go into an arrangement to pay with a lender, it is important to make sure that you keep up with those payments to avoid additional negative markers appearing on your report, which could prevent lenders wanting to offer you credit in the future.

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For more help and advice about dealing with debt problems or financial troubles, our Debt Advice Centre is full of helpful, unbiased and free-to-use resources to help get you back on track.

Updated 20/02/18 by Jamie Mackenzie Smith

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