Does a DMP affect my credit file?
Yes, it can. A DMP isn’t legally binding. This means your accounts may show that you’re paying less than originally agreed. Lenders can see this and it may make getting credit more difficult.
Because a DMP is informal, creditors may still apply defaults or continue to add interest and charges.
How long does a DMP stay on my credit file?
A DMP itself doesn’t appear on your credit file. However, the accounts included in your plan may show reduced payments, arrears or defaults.
Defaults remain on your credit file for six years from the date they’re issued, whether or not the debt has been repaid.
Accounts marked as settled will remain on your credit file for six years from the settlement date.
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Mortgages and borrowing in a DMP
We don’t recommend taking on more credit while you’re in a DMP, as the focus is on repaying existing debts. However, we understand that circumstances change.
Renting a property
Some landlords and letting agents carry out credit checks. Reduced payments or defaults may be visible and could affect your application.
Getting a mortgage
Lenders may be cautious if you’re in a DMP. You may find it harder to be accepted and, if approved, the terms may be less favourable.
Remortgaging
If you try to remortgage while in a DMP, you may not be offered a competitive rate. If you can’t switch, your current lender may move you to a different rate. A mortgage advisor may be able to help.
Car insurance
You may be credit checked when paying monthly for car insurance. You may still be accepted, but the cost could be higher.
Mobile phone contracts
If you apply for a new phone contract, the provider will usually run a credit check. Choosing a lower monthly plan may improve your chances of being accepted.
Utility bills
Energy and other utility providers may carry out credit checks, particularly when changing payment methods. This could affect the options available to you.
if you’re thinking about borrowing while in a DMP, speak to us first so we can help you understand your options.
Assets and protections in a DMP
A DMP is designed for unsecured debts, such as credit cards or loans and doesn’t include secured debts like mortgages or car finance. These must continue to be paid as agreed.
Your DMP payment is worked out after priority bills and secured debts have been covered.
In some cases, a creditor could apply to secure a debt against your home. If this happens, we can help you understand your options.
What if my circumstances change?
Your income or expenses may change over time.
If anything does change, let us know as soon as possible so your plan can be reviewed.
We carry out yearly reviews to make sure your plan remains suitable. If a different option may be more appropriate at any point, we’ll explain this clearly.
If you’re struggling to maintain payments, speak to us so we can look at your budget again.
Need help with your debts?
We’ve helped thousands of people manage their DMPs during major life changes.
Get debt help online or call us on 0800 316 1833 for a confidential conversation. We’ll explain the solutions available, check what you may be eligible for and help you choose the option that best fits your situation.
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