Different payment markers on your credit report

Posted by Sophie Regester in Credit Reports on 20 March 2017 - Sophie is a Senior Credit Analyst at checkmyfile.

Getting to know the information that appears on your credit report and the markers that represent it is the key to staying on top of your credit report and making sure everything is appearing as it should. By doing this, you'll be in a much better position when you next come to apply for any form of credit or finance.

Markers such as D, DM or DA may look similar, but they all mean entirely different things so it's important to make sure that the markers on your account are an accurate representation of your credit history. Keep reading to find out exactly what each marker means and how lenders are likely to view them.

To see for yourself how payment markers appear on your Credit Report, you can try checkmyfile FREE for 30 days, then for just £14.99 a month afterwards, which you can cancel anytime. You'll get full access to the UK's most detailed Credit Report, with information from 4 Credit Reference Agencies, not just 1.

OK

When you view your credit report the best marker to see is OK. This marker means that the payments for the account in question have been paid and are up to date in line with your credit agreement. Lenders like to see this, because it shows you have got a good history of paying back money that you've borrowed.

S – Settled or Satisfied

If your account has been'Settled' or 'Satisfied', it will appear as the letter S on your credit report. This Means that an account has been closed satisfactorily and no further payments are due. Once an account is recorded in this status, it will continue to feature on your credit file for a 6 year period. After this time period has elapsed the account will automatically be removed within 30 days and will no longer be visible on your file to yourself or lenders.

While a marker showing an account as 'Settled' shows you have a good history of making repayments, if it is shown as 'Satisfied' it means that the full amount has been paid, but only after entering default. While lenders may view a default that has been settled more favourably than one that is still outstanding, the fact that the account entered default in the first place may be enough to deter some lenders.

1 – One Late Payment

A number 1 status confirms that a payment was made late, or you are up to one month behind. One late payment is viewed by most lenders as a relatively minor and common offence due to human nature, so it is unlikely to affect your ability to gain credit.

It’s worth bearing in mind that if a payment is due by a certain date and this date is not met, a late payment can be recorded whether this is made 3 weeks late, 5 days late or one minute late, it doesn't make a difference. Many lenders will not use the late payment marker if payment is made within a certain time frame, and they may have a little wriggle room if extenuating circumstances led to the lateness, but they are not obliged to grant you any favours in this regard. Late is, after all, late.

Arrears Monthly Markers

2, 3, 4, 5, and 6 follow on in a very straight forward pattern - the more consecutive monthly payments missed, the numbers increase. Any of these statuses count as ‘arrears’, the higher the number the more serious the arrears and the more negative the connotation for your credit file and score.

D – Default

D represents ‘Default’, which is the most serious case of arrears that can be recorded. A default is also a form of account closure, meaning that the all-important 6 year reporting period starts from the date of default. That being said in some cases, the account may only be marked as closed when the outstanding balance has been paid and this may depend on the lender or the credit reference agency they have reported to. Regardless of whether a default is recorded as open or closed, if a balance remains outstanding you can still be chased to repay this indefinitely.

DA

DA is used to show ‘Debt Assigned’, this is reported when an account has been sold to a debt collector and the status with the original lender indicates DA to show it has been passed on.

SF & US – Satisfied Fully and Unsatisfied

SF is used to indicate that an account in default has been paid in full but this does not remove the default status, which remains visible in the account history for the full 6 years from the date of default. Paying a default does not reset the six year reporting period. Conversely US indicates an account in default remains outstanding and has not been fully paid.

PS – Partial Settlement

PS is similar to SF but indicates that a ‘Partial Settlement’ has been agreed, i.e. debtor and lender agree to a lesser amount being paid to settle an account where the full balance is unlikely to be paid.

AR – Arrangement to Pay

AR doesn't really fit the trend previously talked about here, it has the same weighting as serious arrears but is the status used when the normal payments on a credit agreement cannot be met. An ‘Arrangement to Pay’ is on the face of things the responsible way to advise a lender that you cannot pay the usual amount specified in your credit agreement, but lenders still consider it to mean your account is in arrears, so it remains a negative marker.

For that reason it's important to think carefully before asking for an Arrangement to Pay as it harms your credit file more than one or two late payments would, and worse still many lenders will not warn you of this. An arrangement can also be recorded when you overpay, because again the payments are not being made in line with your original credit agreement.

Again you may not be warned of this and you may believe you are actually helping your credit file, rather than hurting it by making extra payments.

DM – Debt Management

DM represents Debt Management, debt management plans (DMP) are typically arranged by a third party company or charity who contact and set up regular payments with your creditors. Companies will not do this out of the kindness of their heart, and they'll take a cut of every payment you make. Debt charities, however, will be able to do this free of charge.

VT – Voluntary Termination

VT stands for voluntary termination and is used when an account that was due to run for a longer period is settled early, for example if you take out car finance to run for 3 years and return the car within one you may well see a VT status on the account. The record of a VT status has a neutral connotation and it is not regarded as a negative.

U – Unreported

U stands for ‘Unclassified’, it is often the status recorded when an account is newly opened and the lender does not have any other activity to report on the account. U markers are neutral, so are not regarded positively or negatively by lenders.

Q – Query

Q is for ‘Query’ and is used when an account is under review, usually due to a query between customer and lender regarding the account.

IN – Inactive

IN represents ‘Inactive’ meaning the account is open but is not currently being used. The time it takes for an account to become inactive may vary depending on which lender you are with. While it is a neutral marker, it is there to alert prospective lenders that the account hasn't been used for a sufficiently long period of time, attempting to spend large amounts using this account could be a sign of fraud.

NR – Not Reported

NR is ‘Not Reported’, which indicates that an update has not been provided between the lender and credit reference agency for that month. In the eyes of a prospective lender it means that they cannot tell whether a payment was made or missed, so this is a neutral marker.

How to Build Your Credit History From Scratch

When it comes to building a credit history we all start from square one, but for some people this challenge can happen more than once, or much later in life than average. That might be because they’ve never borrowed money and have no credit history to speak of, or because they have had a financial setback and are starting again from scratch. No matter the reason, the catch 22 of applying for credit is that without previous proof of having and managing credit well, you’ll find it harder to be accepted.

Published on 21 Oct 2018 by Beth Jennings

Full Article

How Your Phone Contract Affects Your Credit Report

Some people only really consider their Credit Report and the information it contains when they’re about to apply for a traditional form of borrowing, such as a credit card, loan or mortgage. That's why for some it can come as a bit of a surprise to learn that many of the same checks are involved when attempting to take out a mobile phone contract.

Published on 6 Sep 2018 by Tom Magor

Full Article

Can my ex impact on my credit score

One of the most common queries we receive at checkmyfile comes from customers who view their Credit Report and discover that they’re still financially associated with an ex-partner.

Published on 2 Aug 2018 by George Coburn

Full Article

What Do Lenders Look For When You Apply For Credit?

Lenders and their appetite for, well, lending, are as unique as the customers they serve. Each one is looking for specific criteria from their target customers in exactly the same way that most of those customers try to select a lender that best suits their individual requirements. That’s one of the reasons you shouldn’t think your hopes of getting a loan rest with your Credit Score alone: you need to think about the context and reasons behind it as well. Each piece of information on your Credit Report – and the sum of its parts – can be interpreted so differently.

Published on 25 Jul 2018 by Jamie Mackenzie Smith

Full Article

Which accounts will show on your credit file

Credit account information relies on lenders to report those accounts to the UK’s Credit Reference Agencies. Not all types of account will appear on Credit Reports for this reason, so while some regular monthly payments will show up there, many others won’t.

Published on 12 Jul 2018 by Neil Greenhill

Full Article

What are Satisfied and Settled Credit Accounts?

What's the difference between Settled and Satisfied on your Credit Report?

Your Credit Report contains a huge amount of information about you, and how you’ve managed your credit agreements in the past. Different parts of your report will have a different level of influence on how you will be judged by a typical lender, but there are some entries where a small variation can have a big difference.

Published on 2 Jul 2018 by Sam Griffin

Full Article

How my address can influence a credit check

Many people incorrectly assume that their credit score can be plagued by the previous occupants of your address. This, to quote Douglas Adams, is “a load of dingos’ kidneys” and your credit report should entirely reflect your credit and repayment history and has no bearing on your home’s former tenants.

Published on 12 Jun 2018 by George Coburn

Full Article

How To Remove Negative Markers on Your Credit Report

Your credit report is intended to show potential lenders, employers, landlords (and occasionally insurance providers) an accurate representation of what you are like when it comes to borrowing (and repaying) money and managing other credit agreements. Think of it as a CV of your borrowing history that gets updated on your behalf.

Published on 21 Apr 2018 by Jamie Mackenzie Smith

Full Article

Why Does My Credit File Say I'm Dead?

For many people, it comes as a shock when they are informed that they are, regrettably, dead. In fact, it can be a downright inconvenience when you’re trying to apply for credit, but end up getting turned down because you’ve been accidentally listed on the Death Register.

Published on 11 Apr 2018 by Tom Blandford

Full Article

Will checking my credit report affect my credit score

Does checking your credit report affect your credit score? This is a question we are often asked, as more and more consumers regularly access their credit history to check for errors. This seems to be based on the popular misconception that search footprints damage your score, and as checking your credit file leaves a footprint, checking your report must harm your score. However, this is far from the truth.

Published on 5 Apr 2018 by Kelly Luff

Full Article
keyboard_arrow_left

keyboard_arrow_right

We have loads of great customer reviews