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Temporary Repayment Plan and Your Credit File

TTP or Token Payment Plan can hurt your credit file. When you’re on a TTP, your monthly payment is lower then the minimum amount agreed when you took out the credit or loan. The reduced repayment plan each month will be visible on your credit history.

However, though it can harm your credit, a TTP can still make a huge difference especially when you need a break from debt payments. The bottom line is to keep paying your priority bills on time and satisfy the essential living costs as much as possible.

What is recorded on my credit file when on a repayment plan?

The types of information that your creditors can indicate vary depending on your current standing. Following are some of the things that creditors can enter in your credit file:

Payment History

All debt payments are recorded on your credit file. Since your TTP is lower than your minimum debt payments, your creditor logs it as partial payments. So, regardless of whether your creditor is satisfied with your TTP or not, such payment has to listed on your credit file.

 Defaults

Your creditor can add a default on your credit record after several months of paying lesser than the minimum. The defaults on your credit file can remain for six years from the time it was entered. Therefore, it is important that you ensure paying more as soon as your circumstances improved.

Court Judgments and Decrees

If you live in England and Wales, once you get a CCJ, this will be recorded on your credit file. The same can happen if you reside in Northern Ireland and you get a Money Judgment or a Decree if you reside in Scotland. All these will remain on your credit file fr six years.

Would my TPP stop me getting a mortgage or tenancy?

Getting Tenancy

Some of the landlords may reject your application upon conducting a credit review. With your consent, they can check your credit file. They can obtain this consent by letting you sign a form.

There are cases where they will also check public records instead of your credit file. This can be done without your consent. In this case, they can check any insolvencies or court action against you. 

Although some landlords and letting agency would still accept you as a tenant if you can present a guarantor that will agree to cover payments when you can’t. If not, you might be asked to pay a huger deposit in advance.

Getting Mortgage

If you do not own your home or estate, you will find it hard to get a mortgage while on a temporary payment plan

Remortgaging

It can be difficult to replace your existing mortgage to a new one while on a TTP. However, you can consider some alternatives to pursue remortgaging while on a TTP. You can contact us for further advice and help.

Are utilities, insurance or phone contracts affected during a TPP?

Utilities

 Some utility providers will conduct a credit check like when you consider applying for a pre-payment meter that you can pay every month or quarterly

Car Insurance

If you prefer paying your car insurance through monthly instalments under a credit agreement, your provider will review your credit file. Once you can’t keep up with the payments your insurance can be cancelled; hence, you’re likely to be accepted regardless of your credit.

Mobile Contracts 

It would not be easy for you to get a better mobile contract with poor credit. Though you can get a cheaper handset even with poor credit, still it’s not assured.

Can I obtain new credit while I’m on a TPP?

During a TTP, you should not obtain new credit or loan. Since you’re barely coping with current payments, getting a new credit can make it even harder to sustain debt payments.

If there are unexpected costs, you have to get in touch with your TTP provider for available options. They may be able to spare emergency grants from your budget.

Moreover, getting a new loan would lead to lender or creditor checking your credit file. Your poor credit may hinder you in getting approved or may result in getting higher interest charges on your new credit.

Can a TPP harm the people that I reside with?

TTP being recorded on your credit file will not harm the people you’re living with. Unless in the case of joint debt or when two individuals credit are linked or in financial association.

Can I repair my credit score once I paid my debts?

As soon as you’re diligently paying your debts, your credit score will gradually improve. The negative date listed on your file will drop off after six years regardless of whether the debt is paid in full or not.

It’s also possible to arrange a full and final settlement when you can afford paying a lump sum of money. If you have this in mind as you expect to get enough funds for a lump sum payments, seek advice from the settlements specialists to understand the process.

How do I review my credit file?

There are several credit agencies where you can access your credit score for free online. You can get more information on these credit referencing agencies through the government website