Credicorp

Arrears

Arrears are the amounts a borrower owes that have fallen overdue under a credit agreement. When a scheduled payment is not made on time, the account moves into arrears for the value of the missed payment. Arrears are a behind-on-payments position; they are not the same as a default, which is a formal status a lender records only once the breach reaches a defined threshold.

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How arrears build up

Arrears are usually measured by the number of missed payments or the total amount overdue. A single missed payment puts an account "one payment in arrears"; if the next payment is also missed, the account falls further behind. The longer arrears persist, the closer the account moves to the threshold at which a lender may issue a default notice and ultimately register a default.

Default A default is a breach of a credit agreement — most often missed payments — that a lender formally records once the breach reaches a defined threshold… Forbearance Forbearance is the temporary arrangements a lender offers a borrower in financial difficulty — such as reduced or paused payments — to help them recover… Late-payment fee A late-payment fee is a charge added when a scheduled payment is missed, typically after a failed Direct Debit collection. It is separate from interest… Direct Debit A Direct Debit is a standing instruction that lets a lender collect a scheduled payment from a business's bank account. It is governed by the Direct Debit… Recovery Recovery is the action a lender takes to collect a debt that has not been repaid, usually after a default. A responsible lender treats it as a last… /legal/vulnerability/ How Credicorp, a UK business lender, supports customers going through a difficult time — vulnerability policy and support routes. CRA (credit reference agency) A credit reference agency holds credit information and shares it with lenders. For UK business lending the main agencies are Experian, Equifax and… SAR (Suspicious Activity Report) A Suspicious Activity Report is the report a regulated business files when it suspects activity involves the proceeds of crime or money laundering, under… Responsible lending Responsible lending means lending only what a business can sensibly handle, being clear about cost, and supporting borrowers in difficulty. Credicorp… UBO (ultimate beneficial owner) An ultimate beneficial owner is the individual who ultimately owns or controls a company — typically anyone holding more than 25% — identified and… AML (anti-money laundering) Anti-money laundering (AML) is the set of laws and checks that require lenders to verify who they are dealing with and to report suspicious activity…

Clearing arrears

Arrears can be cleared by paying the overdue amount in full, or by agreeing a structured catch-up plan that adds an amount to future payments until the account is brought up to date. A lender that is told about a difficulty early can often agree forbearance — a temporary arrangement such as reduced or paused payments — rather than pressing for immediate payment in full.

Arrears in business lending

Credicorp lends to UK limited companies and limited liability partnerships, not to consumers. Where a company falls into arrears, the most effective step is to contact us before the position worsens. Because we lend to the company and take no personal guarantee, arrears sit against the business, not against a director personally. We would always rather agree a workable arrangement than let arrears harden into a default. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

Related / See also

See default, forbearance, late-payment fee, Direct Debit and recovery. If your business is behind on payments, contact us early at /help/; support for vulnerable customers is at /legal/vulnerability/.

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