What Is an Arrangement to Pay Marker and Will It Stop You Getting a Mortgage?
- 3 days ago
- 20 min read
Find out why an arrangement to pay can sink a mortgage application even when no lender criteria document mentions it.
Quick Answer
An arrangement to pay is a flag showing you and a lender agreed temporarily reduced payments. It rarely blocks a mortgage outright. Whether it stops you depends on how recent it is, whether it is settled, and whether it sits on secured or unsecured credit.
The marker is not a court order and not a default. It is one cell in your monthly payment history, recording that an account ran on special terms for a period. Most specialist lender criteria do not list arrangements as a named, counted item at all. That is precisely why the decline felt so unexplained.
Because it is not a published rule, it reaches the outcome indirectly, through the credit score at the automated tier and through an underwriter's judgement at the manual tier. The practical questions are what the arrangement is attached to, whether it has ended, and whether the account has been closed. Those three answers move the case far more than the marker itself.
Reviewed by Ben Stephenson, FCA authorised (FRN 496907) · 25+ years' experience · 4.9★ on Google. Updated: 27 July 2026.
Who Is This Guide For
Best for remortgagors declined without a reason given, first time buyers who agreed reduced payments during a difficult year, and homeowners who took Covid era support and never knew it was recorded, who all need to work out what their credit file is actually saying.
Key Points
Most specialist criteria list no arrangement item at all
An open account's 6-year retention clock never started
Secured arrangements are far more serious than unsecured
Table of Contents
How Long an Arrangement to Pay Stays on Your File: Two Clocks, Not One
How You Can End Up With a Marker You Never Knowingly Accepted
Establishing What Is Actually There, and Correcting It Where It Is Wrong
Where an Arrangement Works in Your Favour, and Where It Costs You
Timing an Application Around the Windows That Actually Count
Declined for Something That Appears in No Criteria Document
You were declined, so you went looking for the rule you broke. It was not there.
That is not you missing something. Search the published intermediary criteria of the specialist, adverse capable lenders for "arrangement to pay" or "payment arrangement" and, in the main, you find nothing. Defaults are listed. County court judgments are listed, and secured arrears are set out tier by tier, in months.
Arrangements are simply absent from the page.
One specialist's published matrix does address the nearest equivalent, and its wording is the most honest sentence in this entire subject. Against unsecured arrears, across every tier, it says they are "not counted but may affect credit score".
Read that twice. Not counted, so no published rule has been breached. May affect the score, so the outcome can still change.
That is the gap you fell into. You cannot find the rule because, in the ordinary sense, there is no rule. The marker reaches the decision through the credit score and through an underwriter's reading of your file, and neither of those is published.
At the high street, credit scored tier the position is more opaque again. A scorecard is a statistical model that ranks applicants by probability of default, and its weightings are not disclosed to brokers, let alone to borrowers. There is no threshold to check your case against beforehand, and typically no meaningful reason given afterwards.
Being declined with no explanation is the normal, expected behaviour of that tier. It is not a malfunction, and it is not a sign your case is hopeless.
It also means the same marker can pass at one credit scored lender and fail at another, with no way to know in advance. That is why speculative reapplication is such a poor strategy. Each attempt leaves a search footprint and returns no information you can use.
If a computer stopped your application before a person ever saw it, our guide to what happens when a mortgage is auto declined and sent for manual review explains where human judgement actually enters the process.
What an Arrangement to Pay Actually Is, and What It Is Not
The governing document is the current industry principles for the reporting of arrears, arrangements and defaults, produced by the Information Commissioner's Office alongside the industry reciprocity committee whose members include the three credit reference agencies.
Those principles define an arrangement as a jointly agreed, temporary variation of the contractual payment. A permanent change is treated as a new agreement and gets a new record. A temporary one, such as a payment holiday or a switch to interest only, is recorded against the existing account as an arrangement.
Three features of that definition surprise most people.
First, it is bilateral. A missed payment happens to you, whereas an arrangement is something you agreed to. That is exactly why borrowers are so startled to find it on the file: you consented to the thing that is now counting against you.
Second, the marker is one cell in a monthly payment history grid. It sits alongside codes for payments made on time, months in arrears, defaults, settlements and debt management. It is not a separate record, not a separate entry, and not a court order.
Third, and least understood, an arrangement does not cancel arrears. The principles are explicit that while an arrangement runs, arrears may still accrue and increase, even though a default would not normally be registered.
One credit reference agency's consumer guidance confirms the same thing from the other direction: arrears can appear on the report at the same time as the arrangement flag. So a borrower thinking "I agreed it with them, so it is fine" may in fact be carrying two negatives rather than none.
It helps to be clear about what an arrangement is not. A county court judgment is a court order recorded on a public register of judgments. An arrangement is a private data sharing entry between you, your lender and the agencies.
Readers routinely conflate "on my credit file" with "on a public register", and the two are not remotely the same thing. On a like for like recency basis, the rough severity order runs from bankruptcy and repossession, through county court judgments and defaults, down to arrangements and then isolated missed payments.
There is one trap on the default side worth stating plainly. An arrangement holds a default off only for as long as you keep to it.
Break the arrangement when you were already three or more months behind on the original terms, and a default can be filed as soon as a payment is missed, with no fresh three month runway. A broken arrangement is therefore a materially worse position than a maintained one, which is a point almost no consumer article makes.
How Long an Arrangement to Pay Stays on Your File: Two Clocks, Not One
Almost every article on this subject says six years and stops there. That is roughly right and imprecisely stated, and the imprecision is exactly what costs people mortgages.
There are two clocks, and they are constantly conflated.
The first is the marker in the payment grid. Each month's entry ages within a rolling 24 or 36 month history. This is the clock most lender criteria actually test, because criteria are written as "no more than X in the last 12 months" or "X in the last 36 months".
The second is the account record itself. Under current industry principles, the account record is retained for six years from the default date if it defaulted, or six years from the date of closure if it did not.
Now the consequence, which is the single most useful fact in this article.
A defaulted account's six year clock starts immediately. An account that is not in default has a clock that starts only at closure. An open account sitting in a live arrangement therefore has a retention clock that has not started at all.
So an arrangement can outlast a default. The comfortable line that an arrangement is always better than a default is true on severity and can be false on duration.
A borrower who accepted an open ended arrangement specifically in order to avoid a default may, years later, be in a worse file position than someone who took the default and let it age out. That is not an argument for seeking a default. It is an argument for understanding that the trade off runs in both directions before you agree to an arrangement with no end date.
There is also a genuine discrepancy between sources on duration, and it should not be papered over. One credit reference agency's consumer guidance indicates an arrangement flag may show for around three years after the arrangement ends. The current industry principles point to six years for the account record.
The sources do not agree. That disagreement is itself a reason to check all three files rather than trust a single number from a single agency.
What is being measured | How the timing typically works |
A default on an account | Six years from the default date, under current industry principles |
An arrangement on an account that later closes | Six years from the closure date, not from the date the arrangement began |
An arrangement on an account still open today | A retention clock that has not started, because there is no closure date yet |
How lender criteria test the same history | Rolling windows of 6, 12, 24 or 36 months, measured from the event |
An arrangement that is still running | Effectively at month zero every day, because the event has not ended |
The practical takeaway is that the file clock can run up to six years, but the criteria clock is commonly 6, 12, 24 or 36 months. The criteria clock is usually the one that decides your case.
How You Can End Up With a Marker You Never Knowingly Accepted
The industry principles say it is important that you are made aware when an arrangement is made, that it shows on your credit file, and that arrears may accrue while it runs. A principle, however, is not an enforceable disclosure rule.
An enforceable rule arrived only on 4 November 2024. Under MCOB 13.3.4AR(2), firms must give customers adequate information to understand the implications of a proposed arrangement, including the potential impact on the overall balance and how it is to be reported to the credit file, per FCA (2024).
The wording was deliberately narrowed during policy making, from the implications for the credit file to how it is reported to it, because lenders argued they could only state the factual information they report and not the broader consequences, FCA (2024).
Two things follow, and both of them matter to you.
Anyone who entered an arrangement before 4 November 2024 had no equivalent entitlement to be told how it would be recorded. That is the structural reason a very large group of borrowers is now carrying a marker they never knowingly accepted.
And even now, the duty is to tell you how it is reported, not what it does to your next mortgage. The regulator expressly accepted that lenders cannot predict downstream interpretation. You can be fully and compliantly informed and still have no idea you have just made your remortgage harder.
For the same reason, the widely repeated claim that the regulator says forbearance should not affect your credit file is simply wrong. FCA (2024) required transparency about how support is reported. It never required protection from it.
The Covid handover that created most of these markers
The Covid era support is where most of the confusion sits, and getting it right matters.
Payment deferrals granted between 17 March 2020 and 31 July 2021 genuinely were not reported. The regulator directed firms not to report a worsening status on the credit file during any initial or further payment deferral period, FCA (2020).
The trapdoor was what came next. The tailored support that followed those deferrals was reported. One agency's guidance is explicit that where tailored support results in pausing or reducing your regular payments, that is likely to appear on the credit report.
So the precise story is this. The payment holiday itself did not create a marker, and the tailored support you rolled into afterwards did. Many borrowers were told the truth about the deferral, then moved seamlessly into something where that reassurance no longer held.
The Mortgage Charter, commonly misdescribed
The Charter is a separate matter again. HM Treasury (2023) allows a six month switch to interest only payments, or a term extension, without a new affordability check or an effect on the credit score, and UK Finance (2024) states that Charter arrangements are not reported to the credit reference agencies.
So the claim that the Charter put a marker on your file is not supported by the published position. Two caveats matter, though.
Invisible is not the same as undetectable. Lenders can still see your balance, your payments and your term length, so a term extended by ten years is plain to any underwriter reading the file.
And the Charter route is designed for borrowers who are still up to date. Once you are actually behind, what you are offered is forbearance under MCOB 13, which is reported. The same borrower, weeks apart, can end up with materially different credit file outcomes depending on whether they asked for help before or after falling behind.
UK Finance (2026) puts the point plainly: contacting your lender to find out what support is available does not affect your credit score, whereas missing a payment can. If you are weighing that decision right now, our guide on what happens if you miss a payment before remortgaging covers the sequencing in more detail.
Secured or Unsecured: The Question That Decides Your Answer
Before you panic, look at what the arrangement is attached to. Two borrowers with an identical marker can be in completely different positions, and this is the variable that decides which.
Every specialist criteria matrix reviewed counts secured arrears explicitly, tier by tier, in windows measured in months. The same matrices treat unsecured arrears as uncounted, or tolerate them generously. One publishes tolerances of one, two or three unsecured arrears within six months depending on tier, with a packaged route considering no maximum number at all.
So an arrangement on a mortgage or a secured loan is a materially more serious matter than one on a credit card, a catalogue account or a phone contract.
The mechanism behind that is simple. An arrangement on secured credit very often sits next to a secured arrears status, and secured arrears are a counted, published, pass or fail criterion, commonly tested at none in 12 months and one to three in 36 months. An arrangement on unsecured credit generally is not counted at all.
Deposit size interacts with this more than most people expect. Above 90% loan to value, one specialist requires the file to be up to date with no current arrears on major unsecured items, and the highest loan to value bands commonly require a settled debt management plan going back three years or more.
Coming down a loan to value band can therefore buy real tolerance at the same lender. That makes deposit one of the very few levers you genuinely control, alongside timing. If your file sits just outside high street appetite, the near prime tier is often the right first stop rather than the heavier adverse ranges.
Case study, illustrative composite, not a real client. A two income household in the South East had a joint income of around £84,000 and wanted to remortgage a property valued at £430,000 with a balance of £280,000, an LTV of roughly 65%. During 2025 one of them was made redundant, and they agreed five months of reduced mortgage payments directly with their lender, which was recorded as an arrangement on secured credit and sat alongside a secured arrears status. Their product transfer was refused and two credit scored applications were declined, despite the low LTV and both of them being back in full time work.
A specialist lender was able to consider the case on the basis that the arrears were more than twelve months old and had been fully made up, with affordability assessed against a stress rate set above the pay rate they would actually be charged. The figures are illustrative only and are not a quotation.
That case is the whole point of this section. The type of credit the arrangement sits on mattered far more than the strength of the income or the size of the deposit.
Payment Holidays, Utility Plans and Markers You Forgot
A payment holiday that rolled into tailored support
You took a deferral in 2020, were told it would not affect your credit file, and that was true. What followed it, when the deferral ended and reduced payments continued, was not covered by the same protection.
This is the most common source of a marker nobody remembers agreeing to. Check the months immediately after your deferral ended, not the deferral window itself.
A utility or telecom arrangement you had forgotten
Arrangements are not confined to loans and credit cards. Agreements to pay a reduced amount on non credit accounts such as utility or communications accounts can also be recorded, and the industry principles note that presentation may differ depending on the product.
Be careful here, because published sources do not confirm which providers report arrangements, under which marker, or with what retention. Treat this as something to look for on your file rather than something to assume.
An arrangement on an account that is still open years later
This is the quiet one, and it is the reason to read the two clocks section again. An arrangement that ended in 2021 on an account you cleared but never closed still sits on a record whose six year retention clock has not begun.
The practical action is to check whether the account is actually closed. If it is not, asking the lender to close it is worth exploring, because closure is what starts the clock. No published source states a lender must close an account on request, so treat it as a reasonable request rather than an entitlement.
A marker applied in error after a completed repayment plan
Arrangements do sometimes continue to be reported after they have ended, or a default gets registered even though the arrangement was never broken. Both are genuine grounds for correction.
So is a marker sitting over the protected Covid deferral window, or a marker attributed to Charter support that the published position says is not reported at all. Our guide to common credit report errors covers how these entries tend to appear and what evidence tends to resolve them.
Establishing What Is Actually There, and Correcting It Where It Is Wrong
Check all three agency files, not one. The current industry principles state that the reporting of an arrangement may be presented differently depending on the product and the agency, which is a primary source acknowledgement that the three files do not look identical.
The agencies do not even share a common score scale, so a reassuring number on one is not evidence of anything on another. This is a large part of why a borrower can look acceptable to one lender and unacceptable to the next.
For each entry you find, establish the following:
Which account it sits on, and whether that account is secured or unsecured
The date the arrangement started, and the date it ended if it has
Whether the account itself is open or closed today
Whether arrears markers are sitting alongside the arrangement flag
Whether the entry is actually accurate
Where an entry is genuinely wrong, there are two routes. The first is the ordinary dispute: raise it with the credit reference agency or with the original lender. The Information Commissioner's Office states that agencies have one month from receiving your request to respond, extendable by up to two further months in certain circumstances.
The second is statutory. Section 159 of the Consumer Credit Act 1974 lets someone who believes an entry is incorrect and prejudicial require the agency to remove or amend it, on a sequence of 28 day timescales. If the entry is not amended, you may add a notice of correction of up to 200 words, which the agency must include whenever it supplies information based on that entry.
Be realistic about what the notice achieves. It does not remove the marker, it attaches your explanation to it, and its value is entirely tier dependent. Free text is of little practical use to an automated scorecard, whereas a manual underwriter genuinely reads the file.
The honest limit is this: an accurately reported arrangement that you genuinely agreed to is not removable through the dispute process. Disputes fix errors, not regrets. Spending three months on a doomed complaint immediately before an application is a costly way to learn that.
Where an Arrangement Works in Your Favour, and Where It Costs You
Arrangements are neither the disaster nor the safe harbour they are usually presented as. Both sides are worth setting out honestly.
What it does for you
It normally holds off a default for as long as you keep to it, which preserves the less severe entry.
A maintained arrangement builds an asset. Around 12 months of kept payments is itself the track record several specialist lenders look for before considering a case, so a borrower part way through is not waiting for nothing.
It sits well below defaults, judgments and repossessions in severity, and specialist tiers absorb far worse. Some published tiers consider several defaults and multiple judgments within 24 months.
On much specialist criteria an arrangement on unsecured credit is not a counted event at all.
What it costs you
On an open account the retention clock has not started, so the history can stay visible for longer than a default would have.
While it is running it never ages, because every criteria window is measured from the event and the event has not ended. That is why simply continuing the arrangement and reapplying later tends not to work.
It commonly costs loan to value. Active arrangements and recently settled ones are frequently capped several bands below what a settled, aged one allows.
It can push you out of the credit scored tier entirely, and the specialist tier is not free. Rates and fees are typically higher than mainstream equivalents, and one specialist charges an additional fee of between £1,000 and £2,500 to consider cases that fall outside its standard criteria.
Break it while three or more months behind on the original terms and a default can follow immediately.
That last point is why the track record is worth protecting carefully. It is fragile in a way most borrowers are never warned about.
If the arrangement is one item among several on your file, the wider picture matters more than any single marker, and our overview of mortgages with adverse credit sets out how the tiers stack up.
Timing an Application Around the Windows That Actually Count
Timing is the strongest practical lever you have, because criteria windows are the binding constraint rather than the six year retention date.
Work backwards from the windows that recur across the specialist tiers: 6, 12, 24 and 36 months. Knowing the exact end date of your arrangement can be worth several months of patience and a materially different tier of lender.
If the arrangement is settled and the account is closed, work out where the six year clock now runs from. If it is settled but the account was left open, closing it may be what starts that clock, so it is worth raising with the lender.
If the arrangement is still active, roughly 12 months of maintained payments is the threshold that recurs most often across published criteria. Three more months of clean payments can genuinely change which lenders can look at you.
Then consider the loan to value lever alongside the timing one. A case blocked at 90% may be viable at 85% or 75%, at the same lender, on the same file.
What to avoid is speculative applications at the credit scored tier while you wait. That tier gives no reason for a decline, so repeated attempts generate damage without producing any information you can act on. If missed payment markers sit alongside the arrangement, the same window logic applies to them, and the two sets of dates rarely line up neatly.
It is also worth keeping the scale of this in perspective. UK Finance (2026) reported 79,110 homeowner mortgages in arrears of 2.5% or more of the balance in the first quarter of 2026, around 0.91% of homeowner mortgages, down 2% on the previous quarter.
And FCA (2026) data shows around 311,000 mortgages had monthly payments reduced through temporary interest only arrangements or term extensions between July 2023 and December 2025, roughly 3.5% of regulated mortgage contracts. A very large number of people have had their payments changed, and most of them carry no marker for it.
You are not an outlier, and the direction of travel in the arrears data is improving. The task is to work out precisely what your file says, and then to match it to a lender whose criteria it fits.
FAQs
Is an arrangement to pay as bad as a default?
It is generally less severe, but not always shorter lived. Under current industry principles a default is retained for six years from the default date, whereas a non defaulted account record is retained for six years from the date of closure. A defaulted account's clock starts at once, while an open account in an arrangement has a clock that has not started, so an arrangement can end up visible for longer.
How long does an arrangement to pay stay on my credit file?
Six years is the figure usually quoted, and the current industry principles support six years for the account record, running from the default date if it defaulted or from closure if it did not. One credit reference agency's consumer guidance instead describes an arrangement flag showing for around three years after the arrangement ends. The sources genuinely differ, which is a good reason to check all three files. Separately, most lender criteria test 6, 12, 24 or 36 month windows, so an arrangement often stops counting against an application well before it leaves the file.
Why does my Covid payment holiday show as an arrangement?
The deferral itself should not appear. The regulator directed firms not to report a worsening status during any initial or further payment deferral period, FCA (2020), and deferrals granted between 17 March 2020 and 31 July 2021 were not reported. What was reported is the tailored support that often followed once the deferral ended, where payments continued to be paused or reduced. That handover is where a great many unexpected markers came from.
Can I get the marker removed?
Only if it is inaccurate. Errors can be raised with the credit reference agency or the lender, and agencies have one month to respond, extendable by up to two further months. Section 159 of the Consumer Credit Act 1974 provides a statutory route on 28 day timescales, including the right to add a notice of correction of up to 200 words alongside the entry. An accurately reported arrangement you genuinely agreed to is not removable this way.
Should I wait until it drops off before applying?
Often not, and rarely for the full six years. Lender criteria are typically written in 6, 12, 24 and 36 month windows rather than six year ones, and tolerances vary widely between tiers. Whether the arrangement is settled or still active, and whether it sits on secured or unsecured credit, tends to matter far more than its total age.
Summary
An arrangement to pay records a temporary, jointly agreed reduction in payments. It is rarely a published pass or fail criterion, which is why a decline feels unexplained, and it reaches the outcome through the credit score and the underwriter instead. What it is attached to, whether it has ended, and whether the account is closed matter more than the marker itself. If you are unsure what your file says, it is worth having it read properly before applying again.
Updated: 27 July 2026
Written by Ben Stephenson, CeMAP-qualified Mortgage Broker.
Manor Mortgages Direct is FCA authorised, FRN 496907, has traded for 25 years, is highly positively reviewed, 4.9 rated on Google, and has helped thousands secure the right mortgage. Bristol-based mortgage brokers, assisting clients nationwide.
Sources
ICO and SCOR, Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies (current) - https://docplayer.net/16161965-Principles-for-the-reporting-of-arrears-arrangements-and-defaults-at-credit-reference-agencies.html - accessed 27 July 2026
SCOR Online, Key Documents (2026) - https://www.scoronline.co.uk/key-documents/ - accessed 27 July 2026
FCA, Mortgages and coronavirus: updated guidance for firms (2020) - https://www.fca.org.uk/publications/finalised-guidance/mortgages-and-coronavirus-updated-guidance-firms - accessed 27 July 2026
FCA, PS24/2: Strengthening protections for borrowers in financial difficulty (2024) - https://www.fca.org.uk/publication/policy/ps24-2.pdf - accessed 27 July 2026
FCA, FG24/2 (2024) - https://www.fca.org.uk/publication/finalised-guidance/fg24-2.pdf - accessed 27 July 2026
FCA, Mortgage Charter uptake data (2026) - https://www.fca.org.uk/data/mortgage-charter-uptake - accessed 27 July 2026
HM Treasury, Mortgage Charter (2023) - https://www.gov.uk/government/publications/mortgage-charter/mortgage-charter - accessed 27 July 2026
Consumer Credit Act 1974, section 159 - https://www.legislation.gov.uk/ukpga/1974/39/section/159 - accessed 27 July 2026
ICO, Credit (current) - https://ico.org.uk/for-the-public/credit/ - accessed 27 July 2026
UK Finance, Mortgage arrears and possessions Q1 2026 (2026) - https://www.ukfinance.org.uk/news-and-insight/press-release/uk-finance-mortgage-arrears-and-possessions-q1-2026 - accessed 27 July 2026
UK Finance, Is there a link between forbearance arrangements, credit files and mortgage lending? (2024) - https://www.ukfinance.org.uk/news-and-insight/blog/there-link-between-forbearance-arrangements-credit-files-and-mortgage-lending - accessed 27 July 2026
Experian, Payment Holidays for Mortgages, Credit Cards and Loans (current) - https://www.experian.co.uk/consumer/help-discover/discover/guides/payment-holidays.html - accessed 27 July 2026
TransUnion, Mortgage Charter FAQs (current) - https://www.transunion.co.uk/consumer/mortgage-charter-faqs - accessed 27 July 2026
StepChange, DMPs, credit scores and reports (current) - https://www.stepchange.org/debt-info/dmp-and-credit-score.aspx - accessed 27 July 2026
Debt Camel, How does a payment arrangement work (2025) - https://debtcamel.co.uk/arrangement-to-pay/ - accessed 27 July 2026
Related Guides