# mortgage arrears and credit rating



## rupert7 (12 Aug 2012)

I am on a variable income each month and I will be really struggling to make my mortgage repayments for the next two months. 
I have never been in arrears before. 
If i come off direct debit payments and go into arrears for a month or two until things pick up in October will that affect my credit rating?
I've heard that you have to be in arrears for 3 months in a row for it to affect your rating but not sure if thats true or not.


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## moneyhoney (13 Aug 2012)

Any missed payment - even one - will show up on your credit history. If you can't afford the repayments there are better ways of dealing with this - going interest only for a time, reducing your repayments, extending the term. Talk to your lender ASAP - as in, tomorrow. All the main lenders also have info on their websites.


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## iscritto (13 Aug 2012)

Are you talking about not paying at all for a few months or paying less.


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## rupert7 (13 Aug 2012)

if i pay less than the full amount for a month or two will that affect my credit rating also?
i.e. less than the interest


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## mark12 (14 Aug 2012)

As long as the bank agrees with any given amout your credit rating will not be affected, what worries me as a taxpayer with no debts is the growing sentiment amongst ordinary law obiding citizens, including friends of mine, who admit that they don't give a damn about their credit rating at all, all they want is a deal or to pull out of the mortgage, and they mean business


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## iscritto (22 Aug 2012)

> As long as the bank agrees with any given amout your credit rating will not be affected



Not always the case the bank can report late payments on your ICB if the amount you signed up to is not paid. Unless you have a formal arrangement (restructure) completed with the bank. An arrangement where they agree you can pay less for a few months, then catch up can show on your ICB.


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## rupert7 (22 Aug 2012)

how long does it last on your record for?


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## iscritto (22 Aug 2012)

5 years after the loan ends.


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## iscritto (22 Aug 2012)

You have 30 days to make payment after your billing date before the bank are allowed to report as late payment. So if you are careful you could stay in arrears for one monthly payment without affecting your ICB as you would be paying the arrears within 30 days. 

What date does the loan bill on ?


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## mark12 (22 Aug 2012)

The problem is that, in order to get the bank to agree in writing to a reduced monthly amount you have to miss a few payments, therefore your credit rating will be affected anyway, but again that is not a worry for many anymore, they will never be able to borrow anyway. 
You can't just go to your bank and say that you are in difficulty, they will tell you that you are not until you miss a payment. 
And they have a point there, if you are paying the full amount it means that you can pay the full amount Rupert7, so no excuses please.


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## rupert7 (23 Aug 2012)

iscritto said:


> You have 30 days to make payment after your billing date before the bank are allowed to report as late payment. So if you are careful you could stay in arrears for one monthly payment without affecting your ICB as you would be paying the arrears within 30 days.
> 
> What date does the loan bill on ?


 
thanks for that info iscritto, 
So I could pay 29 days late each month, putting me in arrears but my credit rating would not be affected?


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## iscritto (24 Aug 2012)

Yes but you might be better using 20 or 25 days.. cover for weekends and time for payments to clear.


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## Savvy (9 Sep 2012)

mark12 said:


> The problem is that, in order to get the bank to agree in writing to a reduced monthly amount you have to miss a few payments, therefore your credit rating will be affected anyway, but again that is not a worry for many anymore, they will never be able to borrow anyway.
> You can't just go to your bank and say that you are in difficulty, they will tell you that you are not until you miss a payment.
> And they have a point there, if you are paying the full amount it means that you can pay the full amount Rupert7, so no excuses please.



Yep, This reminds me of a situation that I was in a few months back.
Due to job changes I informed my lender(UB) weeks in advance that I would not be able to make the next payment but would be fine from the following month onwards. I asked what they could do to assist me.
They told me there was nothing that they could do as they would usually make arrangements when people were in arrears by 3 mths or more. I told them I would do my best to make the payment(which I couldn't). So I'm one month behind and paying a little extra each month to catch up.But no doubt I have a ...0001111 on my credit rating


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## Booter (10 Sep 2012)

rupert7 said:


> thanks for that info iscritto,
> So I could pay 29 days late each month, putting me in arrears but my credit rating would not be affected?



Rupert, 

You could also request the bank to move the date of your monthly payment, to a later date in the month. I recently enquired with my bank (BOI) could I do this, and they told me that I could move the payment date back by 20 days, as long it didn't cross into a new calendar month. This is not part of any MARP or special arrangements - just normal banking operations. 
I've just moved two separate payments from the 1st & 5th respectively, back to the 22nd & 26th. Its not quite a full month break, but not far off. Not sure if all banks do this.


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