Should I be worried about my credit rating while on a DMP?

posted by in Living with debt

Should I be worried about my credit rating while on a DMP?

Well, should I?

Our advisors have been giving debt advice for 25 years and in that time they’ve talked to people from every walk of life who’ve fallen into difficulty with their finances.

Over the years we’ve spoken to lots of people who feel like having a good credit rating is a sign that they’re a good person.

They therefore think that by damaging their credit rating this will somehow make them a bad person.

We’ve never believed this viewpoint, and we don’t think you should either.

Does a DMP affect your credit history?

Firstly a debt management plan (DMP) can be a great way to get back in control of your finances and reduce the payments on your debts to a manageable level (although this does mean that you’ll usually be repaying your debts for a longer period).

Although they’re not obliged to, if your creditors are willing to co-operate, in most cases they’ll freeze their interest and charges too.

The DMP itself isn’t registered on your credit file but the record for debts included in it will have a flag added to them. This should indicate that the debt is being repaid through a DMP, so anyone checking your credit file can see you’re making reduced payments.

The bigger impact from being on a DMP is that you’ll be making reduced payments to each of your creditors. This could potentially lead to:

  • Missed payments being registered against your credit file – these stay there for at least 24 months and up to six years
  • Defaults being added to your account – these remain on your credit file for six years
  • County court judgments (CCJs) being registered on your account, also for six years

It’s almost certain that missed payments will be registered against you on a DMP. Defaults are very likely but that depends on your creditors and CCJs are less likely but can happen in situations where the creditor is unhappy with the payments they’re receiving.

We firmly believe that it’s most important to deal with your debts rather than having a good credit rating. It’s also worth mentioning that for most people their credit rating will already be on the slide before they start a DMP.

Can I improve my credit rating while I’m on a DMP?

I’ve been asked in the past whether it’s a good idea to try and improve your credit rating while on a DMP, to be more creditworthy once the DMP is complete. My honest opinion is that it’s not worth the bother. Once you’ve finished your DMP there are some steps you can take to improve your credit rating but if you’re still on a DMP then it won’t make a huge difference.

The best thing you can do to improve your credit rating while on a DMP is to try your best to repay your debts. The sooner you can do this the sooner you’ll start to look like a more attractive prospect to future lenders. And a major benefit of being debt free is that you’ll feel better in yourself as well.

What is your credit rating?

This article has talked about credit ratings but we’ve not spent any time considering what your credit rating is and how to get a copy of your credit report.

All lenders make their own decisions based on the information they think is important. Credit reference agencies hold details about your financial accounts but it’s the lenders that crunch the numbers and decide if they want to lend to you or not.

The information on your file can be interpreted differently from one company to the next; one company may decide you can’t be trusted to repay a phone contract, but others may be willing to offer you a credit card.

Don’t sweat the small stuff

Having a debt problem is much more likely to be a symptom of bad luck rather than being a bad person. Our 2016 Personal Debt Statistics Yearbook reveals that nearly 35% of our clients are struggling with debts because of unemployment and illness.

Your credit history only contains facts and figures about your financial accounts, and it would be a pretty terrible tool to find out whether someone is a decent person or not.

So instead of focusing your attention on a credit rating that doesn’t define who you are as a person, it’s better to concentrate on your most important concern: paying off your debts.

What do you think?

  • Do you think that having a good credit rating makes you a good person? Or vice versa?
  • Have you had any experiences of your credit rating stopping you from doing something?
  • Do you know have any good strategies to cope with a damaged credit file?

Share your thoughts below.


James Winterbottom has been a debt advisor for six years. Away from work he is an amateur app developer and writes fiction. James is a lifelong supporter of Huddersfield Town football club, which suggests he is either very loyal or very daft. He also likes to talk about himself in the third person in bio pages.

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Tags Living with debt
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  • lufcfan

    I’m on a DMP, but I’m coming towards the end of it (10 months or so). I’m now down to 5 debts (it was around 11/12 when I started the plan) – given that I’m now paying more than the minimum amounts on each account, and that it would be fairly easy to manage this small number of debts (with direct debits etc), would it not be worth me coming off my DMP so that I can pay off my debts at the same time as beginning to rebuild my credit score?

    • moneyaware

      Hi there,

      If you can afford the full payments then it may be possible to take over dealing with your debts without a DMP. I’d recommend giving us a call to chat through the best way to come off your DMP and how to approach your creditors.

      Kind regards


  • frank

    I work in I.T. not only does a bad credit rating stop me from working in certain areas (banking mainly) but so does being on a DMP, I was made redundant because I could not move to work on an I.T. system for a large Building Society, why? because I was on a DMP.

  • SDav

    Join the discussion…My DMP has been active for two years and will go on for about another five at my current rate of payment. I have noticed all if the defaults appearing on my credit report. The last of these will be off my credit report six years after my debts are repaid, so I am going to have a bad credit rating for the next 11 years! It is quite depressing because I am afraid I won’t be able to upsize my house and mortgage even after my dmp and debts are gone. Sometimes I think I might have been better off choosing a different debt option.

  • Craig Suv

    I requested a credit report and found that 4 of my 5 creditors had given me a Default which has complicated issues. Only the remaining 1 creditor has put a note stating that I am paying off the debt by means of a DMP so for anyone reading the report it looks bad despite me doing the right thing before things got too out of hand. I wouldn’t mind but these creditors contributed towards my situation by massively increasing interest rates on Visa cards when nobody could get loans, which I also tried to do to pay off my debts quicker and at a higher rate than present so the creditors shot themselves in the foot declining me! Moving forward I will increase the payment to this 1 considerate creditor whenever possible, the rest will get what they do at the moment. I tried to apply for an increased Mortgage while on my DMP, I got knocked back because only 1 default is permitted. They will honour the Mortgage as is stands which is in credit with no payments missed in 16 years but not look to increase it. SDav, not sure if it’s the same for all Mortgage providers but Yorkshire B.S. will allow an increased Mortgage 3 years after the debt is paid off despite the Defaults being on for 6 years.

    • SDav

      Join the discussion…only 8 years to go then! But of course then I will be 49 so there will be a new reason to reject me!

  • Katiana

    DMP / credit rating effects job applications. I am highly qualified but have been unable to move job as the type of work I am looking at will do financial checks. I openly tell people I am on a DMP as I want to take the shame out of it though some are very judgmental as if I lived the life of luxury before – when I was barely managing for years with accumulating credit cards and consolidating loans. I never had money from family to give me a start with anything and paid for all my own university education (via OU courses). I am not a bad person but I haven’t always managed my money in the best way possible (though I never missed a payment with any company). I live in a poor quality rented house that I moved into not long before I arranged my DMP. I don’t think I could move until my DMP is clear and possibly after that. The checks landlords now make are extensive in terms of credit checks etc and I am very fearful if I gave in my notice I could become homeless as another landlord would not have me – despite never ever missing payments for rent or utilities.

    On a positive note I should be debt free around August 2015. I can’t wait! I’ve not been debt free since I was 18 and given my first £2000 credit card.

  • Steve

    Do the defaults not drop off 6 years after they appeared on your file? I’m a year into a DMP that finishes at the end of 2018… the possibility of defaulted accounts staying on my file until 2024 is terrifying. I have no mortgage and no real assets, so would I be better off going bankrupt and starting again in 6 years if it’s going to take that long?

    • Steve

      Hi Rachel,

      That’s extremely reassuring – many thanks.

      I’m not looking to get into a position akin to this again, but I want to get on the property ladder sooner rather than later, so this is good news.

    • Roland Walker

      Yes. They drop off 6 years after the original default date, not 6 years after paying them off

  • Jim

    If you’re on a DMP for a long time (say, 10 years), is it possible that the defaults could drop off your credit file before you complete the DMP?

    • moneyaware

      Hi Jim and thanks for your question.

      Yes, it is possible for the defaults to drop off before the end of your DMP. However there may still be other negative entries on your file.


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  • anna

    does my being on a DMP affect the credit rating of others at the same address?

  • Phil

    I couldn’t care less about my credit rating at the moment, I’m getting my debts paid off at a manageable rate each month and have no intention of buying anything on credit or trying to borrow money. It’s really good to know that my creditors have accepted reduced payments and I’m only paying about £120 per month instead of £400. I am working and we have our own house, so as long as we are careful everything should be ok.

  • Farhiya

    please help me with this.

    I sign student help line company for my daugter, They told me that it will be benefit for her and it was 3 years contract.After one year payment i made realised that i couldnt afford anyomore. i told them and they told me i have to pay regardless,I went to advice bureau and they wrote to them i cant afforded and i will pay £1 monthly. They put me default my account in 2007 and after 6years default was removed my account.One week later in 2013 they put me back again default.Ihave contacted Experian Credit expect and they contacted with them and my account was clear again. I havent checked my account afer one year and last week i login to my account and i found out that they renewed default my account.I again contacted Experian and they told me that i have to contact myself this company to sort it with them.I havent contact them morethen 7years now and how come they renewed.My understand is after 6years regardless payment or not default wil be removed?

    • moneyaware

      Hi Farhiya,

      Sorry to hear about the difficulties you’ve had dealing with this debt.

      The creditor should not be issuing more than one default for an account, as you can only default on a debt once.

      My suggestion would be to contact the company and make a formal complaint explaining what has happened and how you would like them to deal with it for you.

      If you’re not happy with the outcome of the complaint, there is also the Financial Ombudsman Service who help deal with disputes between you and creditors when you’re unhappy with how you’ve been treated. You can find out more about them at

      I hope you get everything sorted,

      Kind regards


      • Farhiya

        Hi Rory
        Thanks for your advice.
        I was talking to one of my friend who told me that if you were paying £1 until default being removed your account,soon you stop paying that they can renew default again,This worrying me. Can they do that?

      • moneyaware

        Hi Farhiya,

        No, creditors shouldn’t add a further default to an account that has already defaulted and been added to your credit file.

        Creditors are allowed to update your credit file with relevant information about the debt, such as your payment history and status of the account but they shouldn’t be adding a further default.

        I hope this helps,


      • Laura

        £1.00 per month! No wonder they are pissed off with you.

      • moneyaware

        Hi Laura,

        If you need all of your income to cover living costs then £1 a month can be a reasonable offer to make.

        Many of our clients feel that £1 a month is too low when we recommend this, but it’s important to only pay debts what you can afford.

        Kind regards


        p.s. I’ve moderated your post to remove a mild swear word to fit in with our commenting policy.

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  • Victor Adair

    I just spent 7 years on a DAS ( Debt Arrangement Scheme and and paid all my debts off and now one of my banks put me on a default notice after the 7 years where up stopping me from getting any credit/mortgage now for 6 years! My advice to anyone thinking of paying back the debt would be to tell them to go stick it! If I had did this 8 years ago i would have had my record cleared by now and saved myself paying back every penny I had for 7 years. Makes me sick that trying to do the right thing doesnt work as they still screw you once you pay it all back.

    • moneyaware

      Hi Victor,

      I’m sorry to hear you’ve received a default so late on in paying off these debts.

      Do you know if they had defaulted the debt in the past? I ask because creditors should only mark an account as in default on your credit file once. So if they’ve changed the date on your credit report you could complain and ask them to change it back to the original default date.

      Kind regards


    • Roland Walker

      You can also ask for the default date to be changed to the data you actually defaulted. That would have been 6 months after you fell into arrears. Write to them and ask them to change the default date. If they refuse then you can take it to the ombudsmen

  • Laura

    I’m almost 70 and on a DMP which will take me more than 6 years to pay off; I don’t give a stuff about credit ratings and I have no intention of asking for credit ever again. To illustrate just how easy it is to get into unmanageable debt; I filled out one of those on-line ‘see if you will be accepted for a credit card’ forms, just out of curiosity Lo and behold, they accepted me! I didn’t proceed with the full application, obviously, but a few days later a card arrived, which I have not activated. The mind boggles.

  • Gemma Grant

    My current issue is that my credit score has been hit by my DMP and the defaults on my account. However I rely on my car due to having a disability. I currently have a PCP agreement, at the end of which I will return the car, but will need to replace it. Really need the reliability of a newish car, and can afford the payments at the moment but worry that my rubbish credit rating will prevent being able to get another car by any means that is reliable.

    • Stuart Brearley

      I thought that buying a car wouldn’t be allowed while on a DMP?

      • Roland Walker

        I expect that the agreement was in place before the DMP started and was included in the budget.

      • Gemma Grant

        Yeah it is. I am trying to find ways to decrease what I borrow for the car, and therefore payments paid each month, but at the end of the day I can’t afford a reliable car without borrowing. Catch 22, I need my car to work, but don’t have the credit rating to be able to buy a car outright. And I need to work to stick to the DMP which resulted after a loss of work and decreased wages. Ahh well!

      • moneyaware

        Hello Gemma

        I would recommend that you give your DMP provider a call and get individual advice – I’m sure there must be a solution to this issue that can be found that will allow you to have transport and keep on top of your DMP payments.

        Best wishes,

    • moneyaware

      Hi Gemma

      Thanks for your message – I’d recommend giving your DMP provider a call. You need to get specifically tailored debt advice for your situation. If you’re disabled, you may be able to get help towards a car through the motobility scheme:


      • Gemma Grant

        Thanks for your reply. I will give them a call. Unfortunately I don’t qualify for motability, as under the current rules I am not disabled enough, although I do receive Personal Independence Payments. I will have to see what happens I guess. If I can still get a decent deal on a car that won’t dramatically increase my payments budgeted in my DMP as I am sure the interest offered will increase (if offered at all). Fingers crossed.

  • Richard Robert Taylor

    Hi. I’ve been on a plan for almost 6 yrs now I have 3yrs left. Always made payments and have paid more once a review is made. Will my credit rating be clear of defaults or of a good nature or will I have to wait a further 6 yrs after its finished..?

    • moneyaware

      Hello Richard

      Thanks for your comment . You’d need to check your credit report, to see when each creditor defaulted you. If the creditors defaulted you over 6 years ago, then your defaults should no longer be appearing.

      Read our guide to getting your report:

      However, even though the defaults may no longer be on your file, your credit rating will most likely be poor – this is because you have been making reduced payments and haven’t completed your DMP, and you’re not taking out new credit.

      Once your DMP is complete you can start trying to rebuild it by;

      – Get your credit report and make sure that all the information held about you is correct
      – Make sure you’re on the electoral register, and keep your household utility bills up to date
      – Don’t have too many separate cards or accounts – if you have a lot, especially ones you don’t use any more, consider closing some of them
      – Take out a small amount of credit and repaying it on time may improve your creditor rating by showing you can use credit responsibly

      I hope that this helps,

  • Thomas Agnew

    I have been on a DMP for quite a while my DMP is due to finish in 2019 – when I last checked with Experian credit it was poor but when I checked yesterday it is extremely good very high – I am assuming this is because I have not missed payments with my DMP and also manage to pay the Annual Review Price

  • Stuart Brearley

    I just read a comment where someone on a DMP is buying a car via PCP. I thought this wouldn’t be allowed?

  • Gary Kirwan

    I have never missed a payment via DMP and have settled some of the debts, over the course of 5 years, but my rating is still poor.

  • Jenny

    After spending years making minimum payments and working harder to meet those payments I finally contacted this agency. The work they do is amazing and really helped change my life. I still have debts but now the defaults are over 6 years they are being removed from my credit file – I could have took ye option of bankruptcy but have kept up managable payments and increased these over the years. I’m now starting to see the light at the end of the tunnel & have learnt to live within my means . Yes I overspent but in the 90s credit was so easy to access as a graduate we were offered so much unsecured credit- loans credit cards etc with little checking to see if payments were manageable. I’m so grateful to step change & the work that they do to advise and help people who have fallen into debt.

    • moneyaware

      Thanks for your comment Jenny – great to hear you’re doing well.


  • Sue

    Having been on a DMP for a few years now and never missed a payment, with four or so years remaining, every six months we would receive a statement from Barclays with our balances on and a standard form saying that we were still in arrears etc. I did a credit check with Experian a couple of years ago and noted that Barclays had logged us as defaulting every single month on our debts with them. Looking at some of the earlier comments on here I am getting the impression that Barclays should only have logged us as defaulting when the DMP was originally set up six years ago, is this correct? (They have since sold our debts on so I should check with Experian to see if the new company is carrying on with this practice)
    Can I challenge this?

    • moneyaware

      Hi Sue

      Sorry to hear that you’re having an issue with defaults. Once you break the terms of your credit agreement i.e. by missing several payments, or by making reduced payments, your account can only default once and this will be marked on your credit file. This is the point that your creditor may start further action to collect the debt. They also have to warn you in writing by issuing a ‘default notice’ before this happens.

      It sounds like you may want to address this with your creditor, and ask for the other defaults to be removed. If there is not a satisfactory outcome to this, then you can complain to the ombudsman. There are more details about complaining to creditors here:

      I hope this helps.


  • Kevin George Bowdery

    Hi.ive been on a DMP for nearly 7 years and my Credit rating is still bumping along the bottom of the barrel. I’ve never missed a payment and my mortgage has always been paid. I’m now being stopped from remortgaging to a High Street APR because of my score. I’ve got 8 positives and 1 negative on my record. The negative is from Northern Rock ( now called Whistletree) who are refusing to show my account in anything other than in Arrears…theyve received £57 per month from me for the last 7 years but didn’t or wouldn’t put it into default. If they had I would have been able to remortgage and settle all my debts.
    My DMP has always been paid on time. I’m stuffed….!.

    • moneyaware

      Hi Kevin

      I’m sorry to hear that you’re struggling with this. I can appreciate that it must be very frustrating.

      Whilst you’re in debt and living on a DMP it can be difficult to get a mortgage – it’s not impossible, but it can be difficult to get the best deals and companies can be less willing to lend to you.

      There is an article dedicated to this subject here:

      The best way forward would be to get out of debt as soon as possible. If you successfully finish your DMP, you’ll have a blank canvas in terms of monthly commitments and be in a much stronger position to save for a deposit and to afford the mortgage payments once you’ve managed to buy a house.

      The important thing to remember is that your credit rating will not stay the same forever. While it might sound a bit cheesy, it’s best to take each day as it comes. Once you’ve finished your DMP you’ll be in a much stronger position and be better placed to qualify for a mortgage.

      I hope that this helps, give us a call if you’d like to discuss things in more detail and get a full advice session.


  • Cobbler

    I’m looking to move nearer my work as I’m spending £200 a month just on petrol alone, however with me being on a DMP will this affect this? I would rather pay this off towards my debts instead of on petrol. My current tenancy agreement comes to an end in April, next month I will be asked if I want to extend, if I say no and then find a property in 2 months time I don’t want to fail their credit checks and be without a home, advice please.

    I have never missed a DMP Payment and never missed a rental payment

    • moneyaware

      Hi Cobbler

      I hope your move works out and you’ll be able to save some money when you move closer to work.

      With DMPs the most important thing is to keep your budget up-to-date and realistic. If you do move, just recalculate your budget. If this means you can pay more each month to your creditors, then you can adjust your payments. If you’re with StepChange, contact our support team (the details will be in the pack you were sent) and they can update your plan with you.

      Kind regards

    • Cobbler


      What are the chances of me being accepted for renting if I am on a DMP?