Negative Payment Markers

What are Negative Payment Markers?

Negative Payment Entries (also called Negative Payment Markers) are placed on a Credit File when an account is either not paid on time or in the manner agreed in the original arrangement. As the name suggests, these entries adversely affect your credit rating and, depending on the number and severity of the entries, may cause you difficulty in obtaining credit.

While the only positive payment entry is the ‘OK’ marker (indicating that the payment was made on time), there are a whole host of different negative payment entries, which reflect various circumstances resulting in the lender not receiving payment.

These include:

  • ‘1’ – indicating that one payment was missed
  • ‘2’ – two consecutive payments missed, resulting in two months’ arrears
  • ‘3’ – three consecutive payments missed – three months’ arrears
  • ‘4’ – four months’ arrears
  • ‘5’ – five months’ arrears
  • ‘6’ – six consecutive payments missed resulting in six months’ arrears. This entry is also the highest recorded marker for consecutive missed payments so, if seven consecutive payments were missed, the entry would still read ‘6’
  • ‘AR’ – an Arrangement To Pay will be placed on your file if you request to pay back a different amount to what was originally agreed (usually this is a reduced amount). Many lenders do not warn customers of the serious impact of arrangements to pay, which are often regarded as serious arrears
  • ‘D’ – a Default will be issued following a long period of non-repayment (often six months’ arrears, but this is wholly dependent on the particular lender). The default indicates that the original agreement has broken down and the borrower ceases to be a customer, instead becoming a debtor
  • Find out more about the types of marker that can appear on your Credit Report

Q: How do I remove negative payment entries?

A: If the reported information is accurate, lenders and Credit Reference Agencies are unlikely to agree to remove these markers, though there may be exceptions to this in rare circumstances.

Alternatively, if a lender has made a mistake in the information they have reported (such as issuing a late payment when no payment was missed), they are legally obliged to amend such errors following contact from the individual concerned.

If not removed, this information will remain on your Credit Report for six years from the date of account closure, with the exception of defaults, that are removed six years from the date of first being reported.

Q: How do they affect my ability to get credit?

A: Different negative payment entries will have varying influence on your creditworthiness, depending on the severity of the particular marker and the lenience of your chosen lender. A single late payment recorded several years ago will likely do very little to prevent you from getting credit, whereas a defaulted account, considered the worst status will be very likely to prevent you from getting accepted for any form of finance.

Q: How do they look on my Credit Report?

A: Negative payment markers will appear in the Payment History section of your checkmyfile Credit Report, along with more information about the lender reporting the marker and the amount the loan is for.

You can see for yourself what markers are being reported by checking your Credit Report. checkmyfile offers the UK’s most detailed report, with information from 4 Credit Reference Agencies, not just 1, so you can see what lenders see. You can try checkmyfile FREE for 30 days, then for just £14.99 a month afterwards, which you can cancel online, by phone or by email.

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