How to improve your credit rating after a DMP

If you’re approaching the finish line of your debt management plan (DMP) then there’s a good chance you’ll be starting to think about what life could be like on ‘the other side’. And thoughts will have turned to how to improve your credit score…

With a fresh start on the horizon, it’s a good time to consider how your financial future will affect what you want to do. Whether you want to save for a big event like a mortgage, or a smaller, everyday occurrence, like getting a good deal on a mobile contract or car insurance, it’s important to spend time improving your credit rating.

Woman sat at laptop with a cup of tea


Here are our top tips to get your credit file on the road to recovery…

Check your credit report

Which? surveyed over 1,000 households and reported that 53% of those asked had never checked their credit score*.

To understand what a credit report lists, what your reports say, and areas you’ll need to improve before considering taking out credit, Which? recommends reviewing your file at least once a year.

Make it your policy to get up close and personal with your credit file as often as you can.

You’ll need to check with all three credit reference agencies (CRAs) in the UK: Callcredit, Experian and Equifax. Each CRA offers an online service letting you view your credit report for free. You can use:

Remember, although these services are free, there are some drawbacks. For example, you’ll be targeted with advertising for products such as credit cards and loans based on your credit score.

If you’re worried about the adverts or want to skip them entirely, you can always go old school and request a one-off paper copy of your report via snail mail (the post) from each agency, costing £2.

Electoral roll

If you don’t know your electoral roll from your sausage roll, then now’s the time to rectify this situation. Not only will you be able to perform your civic duty and vote in elections, but you’ll also give your credit rating a little lift.

Being registered to vote means the people (well, the computer programs) checking your credit rating can verify your details, and will eventually show you have long-term stability.

If you’ve never previously registered, it’s simple to do. You can register online in about five minutes.

Tidy up mistakes

Your credit history should give a clear overview of how you’ve managed your accounts over the last six years. If anything on your report isn’t right then you can get it corrected.

The easiest way to do this is to speak to the company that put the information onto your credit report. If they refuse to correct it, then you can ask the Information Commissioner’s Office (ICO) to investigate and resolve your complaint.

Add a bit more detail to your credit file

Because credit histories only contain facts and figures it sometimes only reveal half a story. If you think there’s an issue that needs a bit more explanation, then you can add a ‘notice of correction’.

You can add up to 200 words briefly explaining anything you’d like clearing up and will be visible to people checking your credit history.

Find out more about adding a notice of correction from credit ratings agency Experian.

Give it time

Credit reports hold information for a maximum of six years. If you’ve just finished a DMP there’s likely to be a record that you’ve been making reduced payments on your debts, or that defaulted on a debt.

As time goes by this information will eventually drop off your report.

Avoid joint finances

If your partner’s credit rating isn’t great, and you live together, it won’t have any bearing on your report. However, if you have joint financial products, like mortgages and bank accounts where you’re both named on the account, then you will be affected.

A note will be added to your credit file that you’re financially linked, and your partner’s credit rating could affect yours, or vice-versa.

If you’re not connected to your partner financially, but you find that your credit file is being affected by them, you can apply for a ‘notice of disassociation’. This is a request you make to the credit reference agencies to remove inactive joint debts from your file, such as a joint bank account you no longer use.

Once you’re debt free, apply for small amounts of credit

One of the quirks of the credit rating system is that having and using credit can improve your rating. Use no more than 50% of your available credit, and only spend small amounts that you can pay off in full every month. This will build up a record of you being a consistent payer.

Save your way to a better credit score

If you’ve just finished a DMP and you’re worried about taking out new credit, there are other ways to rebuild your credit report.

A Loqbox could help you to repair your credit rating while building your savings at the same time. ”This is too good to be true, surely?” I hear you say. But you’d be wrong. Here’s how it works:

  1. You commit to saving between £20 and £500 per month.

Tip: Think about what your monthly DMP payment used to be or use your top-notch budgeting skills to figure out what’s affordable for you.

  1. Purchase a Loqbox worth 12 times those savings.So, if you’re planning to save £20 every month you’ll buy a Loqbox for:

£20 x12 = £240

  1. Instead of paying for your Loqbox outright, you’ll be given interest-free finance to pay for it.Your monthly repayments for the finance will be equal to the savings amount you agreed. So, using our example it’d be £20.
  1. Each payment you make will be registered with all three CRAs, showing lenders that you’re responsible with your money and can manage credit.
  1. At the end of 12 months, you’ll have paid for your Loqbox and can unlock all of your savings.

The great thing about a Loqbox is that if your situation changes during the 12 months you can unlock your box and take all of your money out. There are no penalties or charges for doing this, and it’s better to unlock your box early than miss a payment which will have a negative impact on your credit report.

We don’t endorse Loqbox or receive any financial incentive from linking them, but we think their product could be a good idea for people coming out of debt.

Keep applications to a minimum…

Don’t apply for lots of credit products all at once. It’s a bit like dating: if you get knocked back by one person and then go asking out everyone else in sight you’ll come across a bit desperate.

Lots of applications in a short space of time will make you look like a bigger risk to the company you’re applying to.

If you’re applying for new credit, look out for eligibility checkers such as this one on You’ll need to fill in some details and let them know what type of product you’re looking for and why.

They’ll review what products are out there for you and indicate what your chances of being accepted are, making them easier to compare. Also, the search they carry out won’t impact your credit score.

…or just enjoy a debt-free life

Most people finishing a DMP will have spent many years getting back on track. If you’ve just got yourself out of debt then why not enjoy being debt free for a while before taking on any new credit?

Group of friends enjoying dinner and drinks

One of the benefits of being on a DMP is that it helps you to live to a budget. If it’s manageable for you, try sticking to it and putting the ‘DMP payment money’ aside in a savings account. It’s money you were paying out anyway. You might as well put it towards what you really want!

Are you trying to improve your credit rating after paying off debt? How’s it going so far? Tell us all about it in the comments!

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Posted by in Living with debt