Question re Aqua APR

[dini]

Hello Folks,
I am on the back end of a DMP with Payplan. (another 18 months or so to go)
Having been reading a lot lately, I am only just considering writing to creditors as all are pre 2007 debts.
(Yes I have been in a DMP for 7 years).

Anyway, to get the ball rolling with rebuilding credit history, I have applied and been accepted for an Aqua Classic. (I also aplied for a Vanquis, but that could not be confirmed straight away)
The offered APR is an eyewatering 49.9% (not completely unexpected)
Now I do not have the sllightest intention of using it for borrowing, not at that rate anyway, but does anyone know if they reduce the APR with good management or am I stuck until I have proved myself ? Or will it depend on defaults etc dropping off.
I am planning to put the grocery shopping on it and pay off each month.

I have 2 defauts which will drop off next year, 1 the year after and an annoying AP/DM notice from MBNA/Morgate which will be there till about 2023
Thanks in advance

[Never-In-Doubt]

Re: Question re Aqua APR

Aqua offer decreasing APR's but to help your credit file use it for like fuel, pay it off in full (0%) and generate good credit markers. That's the best way to run it then in about a year apply at your main bank.

Read this --> http://forums.all-about-debt.co.uk/s...-Credit-Ladder

[PlanB]

Re: Question re Aqua APR

I am on the back end of a DMP with Payplan. (another 18 months or so to go) . . . considering writing to creditors as all are pre 2007 debts. (Yes I have been in a DMP for 7 years).

When you're ready (the sooner the better) let us help you with that.

The best way is to start a new thread as a diary and give us the details of each debt in a separate post so we can tackle them individually. We have template letters in a different section which you can send to your creditors.

Why go on paying for another 18 months when some of them may be unenforceable. Keep paying until we establish the situation, but we look forward to getting stuck in

[dini]

Re: Question re Aqua APR

Thank you both.
I will get on it tonight, as can't really do while am at work.

[gravytrain]

Re: Question re Aqua APR

Hi Dini

Question about your DMP with payplan and the associated creditors, did they all mark your accounts defaulted straight form the off or were there AR markers on the account which have dropped off at the same time as the default markers would have ?

My dayghter has one an she was asking me if her markers would go as if they had been defaults, I think they should but am unsure, many thanks in advance.

[Never-In-Doubt]

Re: Question re Aqua APR

One default per account mate so once it's defaulted it must stay defaulted. You CANNOT go from D to AP. Impossible.

A default is, if you like, trump. So once that occurs it stays 6 years. If they add a default THEN a year or two later you decide to repay the default must stay. There will be no new CRA update until it's paid off in which case the default goes to settled / satisfactory.

[gravytrain]

Re: Question re Aqua APR

Thanks so what happens if the debtor enters an arrangement without the account going into default and just an A R marker is placed, does this falloff after 6 years also

[Never-In-Doubt]

Re: Question re Aqua APR

No. In the scenario you describe you'd have 12 years history on a rolling basis.

Ill explain.

You don't default but you fall 5 months into arrears on a loan so agree a DMP. You continue the DMP for 6 years (arrears & loan balance).

At this stage (12 years) your credit file will show similar to this;

[1] [2] [3] [4] [5] [AP] [AP] [AP] [AP] ... And so on.

You'd expect these [AP] markers to stop after 67 (5 years 7 months) BUT as a credit record is a rolling register you'll find in year 7 you'll see 5 years of AP and one blank year (ie the most recent "settled" year) and so on. So on year +4 of completion of DMP your file will show 2 years [AP] and 4 years blank. By year +6 of DMP completion the entry will THEN drop off (ie 12 years later)!!

This is is the reason why at AAD we ALWAYS say get a default. It's the sure fire way to have a clean CRA record at year 6.

Make sense?

[PlanB]

Re: Question re Aqua APR

what happens if the debtor enters an arrangement without the account going into default

That begs the question would that be a truthful record of the situation on a CRA file? The creditor/debtor may have come to some friendly arrangement to manage the outstanding balance, but they (the debtor) has still defaulted on their account by breaching the original Ts & Cs haven't they, so the creditor must record the default.

[PlanB]

Re: Question re Aqua APR

Make sense?

Possibly

[gravytrain]

Re: Question re Aqua APR

I was afraid of that, it seems that the debtor would be worse of as you say, it seems to make a mockery of the ICO guidelines which I think says that a debtor should not be penalized for making a repayment plan.over that of someone who does not pay at all/

Do we know anything about how future creditors regard the A markers in comparison to a D.

[PlanB]

Re: Question re Aqua APR

it seems to make a mockery of the ICO guidelines which I think says that a debtor should not be penalized for making a repayment plan.over that of someone who does not pay at all.

I don't know whether ICO Guidelines can overrule statutes of Parliament (I bet you do ) but if a debtor has breached their Ts & Cs (section 87?) the creditor can record a Default. The big issue for some of us on this website is can the debtor force the creditor to record a Default on the CRAs (because it may suit the debtor) even if the creditor is willing to enter into a payment arrangement for fuzzy wuzzy forbearance reasons.

[gravytrain]

Re: Question re Aqua APR

I don't know whether ICO Guidelines can overrule statutes of Parliament (I bet you do ) but if a debtor has breached their Ts & Cs (section 87?) the creditor can record a Default. The big issue for some of us on this website is can the debtor force the creditor to record a Default on the CRAs (because it may suit the debtor) even if the creditor is willing to enter into a payment arrangement for fuzzy wuzzy forbearance reasons.

No I think guidance is just that unfortunately, however it would make the subject of a complaint, if it would bear any fruit I am dubious about, but I may give it a go on my daughters behalf..

The section 87 requirements have nothing to do with the recording of a default on a credit file, I do know that though

[Never-In-Doubt]

Re: Question re Aqua APR

That begs the question would that be a truthful record of the situation on a CRA file? The creditor/debtor may have come to some friendly arrangement to manage the outstanding balance, but they (the debtor) has still defaulted on their account by breaching the original Ts & Cs haven't they, so the creditor must record the default.

nope see you're confusing a credit record with statute (the cca). A default marker at a CRA is formed when the lender decides the relationship has broken down and/or assuming other factors are taken into account such as the ICO & FCA guidelines. So whether a formal s.87/88 notice was sent or not, for this purpose, is irrelevant.

What IS relevant is whether the lender records the events accurately. For example, with s.87/88 they can default you (claim the full amount due a day after the first payment due is missed according to s.87/88 CCA1974) however with the credit file guidance the lender CANNOT default before 3 months missed payments, but also no later than 6 months missed contractual payments.

Ive seen many people with a formal DN yet their CRA showed a [4] or similar. They're separate issues bound by different rules.

[Never-In-Doubt]

Re: Question re Aqua APR

I was afraid of that, it seems that the debtor would be worse of as you say, it seems to make a mockery of the ICO guidelines which I think says that a debtor should not be penalized for making a repayment plan.over that of someone who does not pay at all/

Do we know anything about how future creditors regard the A markers in comparison to a D.

An AP marker is not classed as penalisation - but we all know it is!! Point is lenders *should* see that as a sign of good management but sadly they don't.

A D will decline most applications automatically as part of credit scoring. If your default is 3+ years old you can get lucky ie your main bank via internal scoring as opposed to external CRA data.