“Missed” monthly payment and credit history

[paradigm]

Back on the 20th August I paid off the outstanding balance on my car finance, I called Audi Financial Services the following day to check that the payment had been accepted and that there was no longer any financial interest in the vehicle, to which they confirmed we were all good. They they proceeded to tell me (as did my settlement figure letter) that it could take up to 10 days to “close” the account, this would take me beyond the next due payment date, but that wasn’t really a worry as I’d simply be paid the payment back as soon as it was seen that my account would be in credit. Great, I’ll leave everything as-is (including the direct debit) and see where we are in a fortnight.

Fast forward to today and I’ve just got home from a week away in Devon. Two letters on the doorstep, one dated the 2nd September informing me that the car was paid off and that Audi Financial Services have no financial interest in the car, excellent. The second letter was dated 31st August stating that I’m a payment in arrears, and that I must sort it out ASAP.

Now my usual payment date was 27th of the month, so within the 10 day window I had been made aware of, hence leaving the DD intact, just in case.

I’m now concerned that I’m going to end up with a “late payment” mark on my otherwise pristine credit history, and that this is likely to impact my search for a new mortgage deal in the next few months. I’m sure I could have a correction made across the various credit reference agencies, but that sounds like it’s going to be a pain to sort.

I’m hoping that the letter is erroneous and no negative marks will be left on my file, but at the same time I cannot help but feel that these automated systems will have already done the dirty.

Will the bank be able to provide proof that I didn’t terminate the DD, and that any missed payment (of which there isn’t anyway) would have been at the request of Audi Financial Services?

 

[DanTheMan]

Not exactly answering your question but in many instances, if missed payments are rectified within 30 days or prior to the company sending their reports to the credit agencies, then it may never even get as far as showing on your credit report.

I know in the various banks / financial services companies that I've worked for previously, the information sent to credit agencies was a snapshot from a particular day of the week / month and tended to be sent quite a while after the event (ie September's information would be sent mid October)

The issue you may have is actually getting this confirmed by Audi aw it's usually a non customer facing, back end team that deal with this and they are almost always impossible to speak to.

If the worst happens, the bank should have a record of when you terminated the Dd and its will be relatively straightforward to get your credit file adjusted.

When I worked for a big bank, mortgage arrears / late credit card payments didn't show unless it was bordering on 2 months of missed payments.

 

[Destination]

Aye, ring them again Monday, specifically ask them exactly what you've said here, i would assume it'll be a 30 day delay in their reporting, and thus they will have corrected things themselves in the meantime and don't report it at all.
Ask them to confirm such in writing.

 

[Django x2]

Back on the 20th August I paid off the outstanding balance on my car finance, I called Audi Financial Services the following day to check that the payment had been accepted and that there was no longer any financial interest in the vehicle, to which they confirmed we were all good. They they proceeded to tell me (as did my settlement figure letter) that it could take up to 10 days to “close” the account, this would take me beyond the next due payment date, but that wasn’t really a worry as I’d simply be paid the payment back as soon as it was seen that my account would be in credit. Great, I’ll leave everything as-is (including the direct debit) and see where we are in a fortnight.

Fast forward to today and I’ve just got home from a week away in Devon. Two letters on the doorstep, one dated the 2nd September informing me that the car was paid off and that Audi Financial Services have no financial interest in the car, excellent. The second letter was dated 31st August stating that I’m a payment in arrears, and that I must sort it out ASAP.

Now my usual payment date was 27th of the month, so within the 10 day window I had been made aware of, hence leaving the DD intact, just in case.

I’m now concerned that I’m going to end up with a “late payment” mark on my otherwise pristine credit history, and that this is likely to impact my search for a new mortgage deal in the next few months. I’m sure I could have a correction made across the various credit reference agencies, but that sounds like it’s going to be a pain to sort.

I’m hoping that the letter is erroneous and no negative marks will be left on my file, but at the same time I cannot help but feel that these automated systems will have already done the dirty.

Will the bank be able to provide proof that I didn’t terminate the DD, and that any missed payment (of which there isn’t anyway) would have been at the request of Audi Financial Services?

It won't leave a late payment mark, partly because it would need to be beyond a full month since your missed payment, and closer to 60 days before it would appear on any CRA. Additionally, mortgage lenders don't care about one missed payment on a car that they can quite clearly see has been paid off. In this current market, they care about deposits, 15pc minimum...

 

[paradigm]

Thanks all, sounds like it’ll likely not end up showing, but I’ll still give them a call on Monday.

It won't leave a late payment mark, partly because it would need to be beyond a full month since your missed payment, and closer to 60 days before it would appear on any CRA. Additionally, mortgage lenders don't care about one missed payment on a car that they can quite clearly see has been paid off. In this current market, they care about deposits, 15pc minimum...

Fortunately I’m only looking to find a new deal at the end of my 5 year fixed term, LTV is going to be around 65-70% so that shouldn’t be an issue!

 

[BUDFORCE]

Thanks all, sounds like it’ll likely not end up showing, but I’ll still give them a call on Monday.

I'd probably spend the few quid it costs and get a copy of your credit report in a couple of months and double check anyway, you dont want to be trying to sort that out whilst applying for your mortgage(see below as to why). I've seen this happen a fair bit, they shouldn't report it, but......

To give you an example, one of the mortgage lenders I worked for, I found out that when people were rigning up to make overpayments on their mortgage, they were reporting those as "arrangements", which would appear to anyone else looking at that report that they were in arangement to pay because they couldn't afford the monthly payments, and is actually really detrimental to have on your report!!!! The point I am making, is the information that gets reported to the credit reference agencies isnt always that great, and I would not always rely on them to get it right, although in your case they will 100% need to correct it, and if not you'd have a very good case to make a complaint, keeping in mind they will be FCA regulated

It won't leave a late payment mark, partly because it would need to be beyond a full month since your missed payment, and closer to 60 days before it would appear on any CRA. Additionally, mortgage lenders don't care about one missed payment on a car that they can quite clearly see has been paid off. In this current market, they care about deposits, 15pc minimum...

That just simply isn't true. Unless, A, you know the lending criteria of every mortgage lender out there and B, the one I work for changed its credit crtieria over the weekend.

 

[paradigm]

Thanks @BUDFORCE, I’m signed up to Experian CreditExpert anyway so can grab my full report any time I fancy.

I was going to keep an eye on it over the next few months as a result of this and the upcoming mortgage application anyway.

 

[LeeUK]

You can get all 3 reports for free every month. ClearScore, Credit Karma, and MSE Credit Club cover them all for free.

Only a fool pays for CreditExpert.

 

[Freakbro]

I have a somewhat similar, but business related issue.

During lockdown I contacted 3 lenders for settlement figures to clear the finance. One of them wasn't taking calls (still aren't) and only contactable by email. They replied twice in two days and gave me 2 different settlement figures, which was a tad confusing, though not a lot of difference between them.

I paid the lower figure in July well before the cut off date they gave, but then in August the D/D still came out.

Have emailed them 3 times during Aug but not a single reply, they still aren't taking calls and the D/D is still active.

Should I just let it continue to take payments and sort out refunds at some later date or cancel the D/D. My obvious concern about that of course is any default reporting, charges etc and the hassle of sorting that out. On the other hand it might actually give them the jolt to contact me.

Not sure which is the best way to proceed.

 

[Quartz]

Have emailed them 3 times during Aug but not a single reply, they still aren't taking calls and the D/D is still active.

Send a letter by registered post.

 

[dirtychinchilla]

I’ve got a similar situation so I’d love to know how you resolve it. I “missed” the first payment on my car because the direct debit wasn’t set up properly. As soon as I found out I rang up and paid manually, but it still shows as a missed payment. Should I just be calling them to get it struck off? It’s from January this year.

 

[BUDFORCE]

I’ve got a similar situation so I’d love to know how you resolve it. I “missed” the first payment on my car because the direct debit wasn’t set up properly. As soon as I found out I rang up and paid manually, but it still shows as a missed payment. Should I just be calling them to get it struck off? It’s from January this year.

Yes I would.

 

[Mrwong]

I have a somewhat similar, but business related issue.

During lockdown I contacted 3 lenders for settlement figures to clear the finance. One of them wasn't taking calls (still aren't) and only contactable by email. They replied twice in two days and gave me 2 different settlement figures, which was a tad confusing, though not a lot of difference between them.

I paid the lower figure in July well before the cut off date they gave, but then in August the D/D still came out.

Have emailed them 3 times during Aug but not a single reply, they still aren't taking calls and the D/D is still active.

Should I just let it continue to take payments and sort out refunds at some later date or cancel the D/D. My obvious concern about that of course is any default reporting, charges etc and the hassle of sorting that out. On the other hand it might actually give them the jolt to contact me.

Not sure which is the best way to proceed.

I would email them, no response then make a full complaint no response after 8 weeks go to the ombudsman.

 

[Vanquish-Storm]

Similar situation here but away in holiday, received a letter saying in arrears after handing s car back. Paid straight away. It wasn't actually in arrears the direct debit was stills active and this was the first we had heard about it.

 

[Django x2]

I'd probably spend the few quid it costs and get a copy of your credit report in a couple of months and double check anyway, you dont want to be trying to sort that out whilst applying for your mortgage(see below as to why). I've seen this happen a fair bit, they shouldn't report it, but......

To give you an example, one of the mortgage lenders I worked for, I found out that when people were rigning up to make overpayments on their mortgage, they were reporting those as "arrangements", which would appear to anyone else looking at that report that they were in arangement to pay because they couldn't afford the monthly payments, and is actually really detrimental to have on your report!!!! The point I am making, is the information that gets reported to the credit reference agencies isnt always that great, and I would not always rely on them to get it right, although in your case they will 100% need to correct it, and if not you'd have a very good case to make a complaint, keeping in mind they will be FCA regulated



That just simply isn't true. Unless, A, you know the lending criteria of every mortgage lender out there and B, the one I work for changed its credit crtieria over the weekend.

It's hardly "untrue" then is it, because, as I said, it is unlikely to appear as a missed payment at all unless it goes beyond 30 days, which it won't. And no, although I can't speak for every lender, you'd have to be one of the worst, highest risk adverse providers to worry about one late payment with a crystal clear explanation. I might not know the criteria of every lender, but I do have an incredibly firm foundation in the knowledge of Credit Scores (and Scoring) and this is simply a non event.

There's more to this though because if the OP had indeed left the DD in place, then a payment would have been taken and an arrears letter wouldn't have been generated. Furthermore, the letter was generated, by computer, on the 31st August, so as I say, a complete non event.

 

[paradigm]

There's more to this though because if the OP had indeed left the DD in place, then a payment would have been taken and an arrears letter wouldn't have been generated. Furthermore, the letter was generated, by computer, on the 31st August, so as I say, a complete non event.

DD was 100% left intact, for the explicit purpose of avoiding this exact situation. Regardless of this event appearing on my credit file, I’m still annoyed in the handling of this (hasn’t happened the last two times I settled an Audi finance agreement).

Edit: Just checked my NatWest app and it still shows the Audi DD as “Active” so I guess that’s proof that this is Audi’s mess-up.

 

[Mrwong]

DD was 100% left intact, for the explicit purpose of avoiding this exact situation. Regardless of this event appearing on my credit file, I’m still annoyed in the handling of this (hasn’t happened the last two times I settled an Audi finance agreement).

Edit: Just checked my NatWest app and it still shows the Audi DD as “Active” so I guess that’s proof that this is Audi’s mess-up.

Make a complaint to Audi finance.

 

[Blackjack Davy]

I missed one payment on a CC debt and they not only charged me, ok thats in the T&C's fair enough - they stated they were writing the credit agencies to downmark my credit score! I'd had the card years and years never had any trouble and out of the blue, bam. Cut the bloody thing up havn't touched it since its not like I don't have enough in my bank balance to cover any bills anyhow.

 

[HungryHippos]

I missed one payment on a CC debt and they not only charged me, ok thats in the T&C's fair enough - they stated they were writing the credit agencies to downmark my credit score! I'd had the card years and years never had any trouble and out of the blue, bam. Cut the bloody thing up havn't touched it since its not like I don't have enough in my bank balance to cover any bills anyhow.

Common mistake if the idea is to pay off the card each month then just do a DD and ask them/set it to take max payment. If I was relying on manually paying mine then I'm sure I'd forget, but mine is just an automatic monthly DD for the balance for that month instead. Never missed a payment, treat mine like a debit card, can't really go wrong this way.

Did you have a DD set?

 

[Adam]

Check pistonheads, loads of people had issues with VWFS during lockdown with leased cars due to be returned but the collection was cancelled due to Covid. Sounds very similar.