Arrangement to Pay markers

Posted by Ben Ryland in Credit Reports on 6 January 2020 - Ben is a Senior Credit Analyst at checkmyfile.

Have you seen an ‘AR’ mark on your Credit Report? Chances are you might glance at the letters and assume that they relate to payment arrears, but on Credit Reports an ‘AR’ appearing on the payment history means an Arrangement to Pay has been recorded on the account.

Find out about the other types of markers that can appear on your Credit Report.

An Arrangement to Pay marker effectively shows that the lender has agreed to re-negotiate and probably accept 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 to mortgage payment holidays, but a crucial difference being that Arrangements to Pay appear on your Credit Report and usually carry a severe negative impact.

The effects of an AR marker

More often than not, this type of marker tends to have a negative impact. That means any mortgage, loan or finance applications you make may be adversely affected by the presence of an ‘AR’ marker.

Even if an Arrangement to Pay is in place, payments may still have been made on time each month, but lenders often view it as a sign that you have been unable to keep up with agreed contractual payments. Due to the perceived extra ‘risk’ this poses, a potential lender could then either decline an application completely or offer a higher interest rate.

Does an AR Marker mean no one will extend credit to me?

Not necessarily. While an Arrangement to Pay will likely harm your Credit Rating, it’s no guarantee that you’ll be unable to get credit elsewhere. Every lender has unique criteria it needs to meet when assessing applications so the decision to either accept or decline you, regardless of the black marks featuring on your Credit Report, lies solely with the lender and its appetite for risk.

How long will AR markers stay on my Credit Report?

Like most other forms of account history on your Credit Report, an Arrangement to Pay will remain for six years from the date of account closure. 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 Credit Report, which will harm your creditworthiness even further.

If you’re unsure whether you have an Arrangement to Pay, the first port of call should be to check your Credit Report – this way you’ll see what a potential lender can see.

If you haven’t already, you can check your Multi Agency Credit Report with checkmyfile free for 30 days, then £14.99 per month. You can easily cancel at any time online, by freephone or email. Our Multi Agency Credit Report is the most detailed in the UK, showing your complete information from the four Credit Reference Agencies, so you can be certain you’re seeing everything.

Updated 06/01/2020 by Sam Griffin

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