Notice of Sums in Arrears (often called a Notice of Arrears) is a formal letter served to a customer when they are in two months of arrears and then at six month intervals after that. The notices have been a legal requirement as of 1st October 2008 and the letter’s contents are strictly regulated.

These are commonly used by landlords informing tenants who have missed rent payments, or by credit card companies who are owed two months’ worth of payments.

Failure to make the payments outlined in the letter could result in a default on your credit file and eviction if it is for rent.

Will a Notice of Arrears show on my Credit Report?

A Notice of Arrears won’t appear on your Credit Report, but missed payments to creditors will. If you’ve received a letter, you’ll most likely have two missed payment markers on your credit file as you need to be two months in arrears to trigger a notice being sent.

For borrowed credit, if you don’t make a repayment after receiving the letter a default notice will follow.

You can check your own Credit Report with checkmyfile and see what is being reported about you by the 3 main Credit Reference Agencies – Equifax, Experian and TransUnion – in one place. It’s free for 30 days, then £14.99 a month and can be cancelled online at any time without fuss.

How does it affect my Credit Rating?

Missing two consecutive payments is likely to have a negative effect on your creditworthiness and could harm your chances of being accepted for credit in the future. It also increases the risk of the account in question being defaulted, which would harm your rating further.