Article by Sophie Regester - 14th August 2020

Different Payment Markers On Your Credit Report

Getting familiar with the information on your Credit Report is key to making sure that lenders see an accurate picture of your financial situation whenever you apply for credit. The credit accounts recorded on your Credit Report will be populated with various ‘markers’ representing the status for each month – these can range from full payments to any late payments and defaults, and everything else in between.

By understanding each marker on your Credit Report, you can see which accounts are helping or hindering your Credit Rating, as well as spot errors that can be resolved.

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 all four Credit Reference Agencies, not just one.

OK

The best marker to see recorded on your credit accounts is the OK marker. This marker shows that the payments for the account have been paid and are up to date in line with your credit agreement. Lenders like to see these OK markers, because they are evidence of you having managed your credit agreement well.

This also means that having a wealth of these OK markers, especially across many different accounts and account types (such as credit card, mortgage, etc.) can be beneficial for your overall Credit Score.

S and SF – Settled or Satisfied

Once an account has been satisfactorily closed, it should be reported with an S marker to show that it has been settled. The account and its repayment history will then be removed once six years pass from date of account closure.

It’s worth noting that the settled marker (S) is usually only reported on non-defaulted accounts, as satisfied defaults will instead be recorded with either a satisfied marker (SF) or none at all, depending on which Credit Reference Agency is holding the data.

Closing an account and receiving either an S or SF marker will mean that no further payments are required. Crucially though, any adverse repayment history on the closed accounts, such as late payments or defaults, will continue to harm your Credit Rating and applications, regardless of whether the balance on the account is subsequently cleared. Only once an adverse account has been removed from your Credit Report will it cease having a harmful impact.

While the Settled marker itself does not harm your Credit Rating, you may find that your Credit Score is reduced after closing a well-maintained credit account. This is because, during a credit application, lenders will look at your active accounts to gauge your creditworthiness. The more active accounts that you have showing reliable, timely payments (which will be shown with OK markers), the more reliable you will seem as a borrower. Generally, a closed account with plenty of OK markers will still contribute positively to your overall score, but this bonus may be slightly lower compared to when the account was still open.

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 a single late payment is unlikely to seriously 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 three weeks late, five days late or one minute late. 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. For most lenders, late is late.

Arrears Monthly Markers

2, 3, 4, 5, and 6 follow on in a very straight forward pattern - the recorded number will increase consecutively with each missed monthly payment. Any of these statuses count as arrears. The higher the number, the more serious the arrears and the more serious the impact on your Credit Report and score.

D – Default

D represents ‘Default’, which is recorded once the lender believes that the credit agreement has broken down, usually due to a sustained period of arrears. A default is also a form of account closure, meaning that defaulted accounts will be removed from your Credit Report once six years pass from date of default. That being said in some cases, the account may only be marked as closed with a Satisfied (SF) marker when the outstanding balance has been paid. This will depend on the lender or the Credit Reference Agency that they have reported the account information 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.

Defaults will severely damage your Credit Report. They will only stop harming your Credit Rating once they have been removed, six years from date of default. This is regardless of any subsequent payment made towards the defaulted account.

DA – Debt Assigned

DA is used to show ‘Debt Assigned’. This marker is reported when an account has been sold to a debt collector. The original lender will then record the status of the account as Debt Assigned to reflect that the debt has been assigned to another company.

US – Unknown Status

Unknown Status (US) is a marker that reflects when the lender has not continued reporting monthly updates to the Credit Reference Agencies. While not always the case, the US marker is often seen on defaulted accounts, as lenders are not required to report monthly updates for defaulted accounts.

US markers can appear on both defaulted and non-defaulted accounts. Providing that the reported balance is £0, there is no further payment required and the account will be considered closed.

PS – Partial Settlement

PS is similar to S (Settled) but indicates that a ‘Partial Settlement’ has been agreed. For example, when a debtor and a lender agree to a lesser amount being paid to settle an account. Partial Settlements are not negative markers and are typically considered similarly to settled accounts.

AR – Arrangement to Pay

An Arrangement to Pay is an agreement with the lender to repay a different amount each month than originally agreed. An Arrangement to Pay is on the face of things the responsible way to advise a lender that you cannot pay the usual amount, but lenders still consider it to be equivalent to 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 Report 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 Report, 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 three years and return the car within one you may 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 – Unclassified

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 check your Credit Report

If you’re looking for the markers on your Credit Report, you can try checkmyfile free for 30 days, then just £14.99 per month. Cancel easily anytime online. Your Multi Agency Credit Report collates the complete information from Equifax, Experian, TransUnion, and Crediva, ensuring that you can see your full credit information on a single, easy-to-use platform.

Updated by Sam Griffin on 14 August 2020

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