What is an...

Arrangement To Pay

An Arrangement to Pay is recorded on a borrower’s Credit Report when the lender accepts a request to raise or lower the cost of scheduled monthly payments at the request of the borrower. Doing so may increase the duration of the loan or the cost of future monthly payments.

How do I see if I have an Arrangement to Pay?

You can check the status of your credit accounts by viewing your Credit Report. checkmyfile offers the UK’s most detailed report, letting you see everything that Equifax, Experian, TransUnion, and Crediva hold about you. Any credit accounts reported with an Arrangement to Pay will be marked with an ‘AR’, so you can easily spot them.

If you haven’t already, trying checkmyfile is free for 30 days, and then just £14.99 per month. Cancellation is quick and easy online at any time.

Many borrowers think that taking out an Arrangement to Pay will reflect positively when approaching lenders in the future because it shows their willingness to try and make payments even in times of financial difficulty. In reality many lenders take it as a sign that the customer cannot keep up with their credit commitments and will struggle similarly with their own product.

For this reason, it is not recommended requesting an Arrangement to Pay unless it is absolutely necessary. An AR marker stays on your Credit Report for six years and can seriously impact your ability to get credit for the whole duration.

Is an Arrangement to Pay the same as a default?

No. While a lender may in some cases view an Arrangement to Pay marker on your Credit Report as severe as a default, they are two different statuses. The main difference being that a default relies on you missing payment for a prolonged period, while an Arrangement to Pay shows that you have paid, just at a different amount to what was originally agreed.

How does an Arrangement to Pay affect my ability to get credit?

The impact of an Arrangement to Pay on your credit rating varies depending on the attitude of lenders and how the rest of your Credit Report looks. Some lenders 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 of Arrangements 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.

The UK's First Provider Of Online Credit Reports

Launched 21 Years, 35 Million Credit Scores & 8 Million Credit Reports Ago

The UK's First Provider Of Online Credit Reports

Related Jargon