DMP and Credit Rating

starks

Hi,
If I have just initiated a DMP with my creditors and 'hyerthetically' I clear this Debt in lets say 3 years does my Credit Score still reflect this for the subsequent 3 years (I have heard the Credit Rating damaged for 6 years) or does the Credit Rating start to 'Heal' once the DMP is paid off?. How long after does the healing take?

Donedoingdebt

If you've entered a DMP then it's likely that you have defaulted on your original credit agreements.
These defaults will stay on your credit file for 6 years from the date of default even if the debt is paid off much earlier.
If the accounts have not been defaulted, the information usually stays on your file for 3 years after they have been settled.

tomb_raider

Hello
I have checked my credit file with Experian online and there are 3 accounts on there showing a default.
2 of them are actually for the same debt but they were passed on to different collection agencies.
I have paid all of them in full through a DMP with CCCS but 1 is showing NO payments made and still shows the full balance owing!
The second (which is the same account as the first) is showing a small balance owing although it was updated in January this year and the DMP final payment was made in November last year.
The third is a disputed debt which was passed to the collection agency listed on the credit file but after not being able to send my requested CCA they passed it back to the original creditor and I have not heard anything since.
I need to get a 'new' car but with this 'poor' credit score I think I won't get a good deal with the interest on a finance deal!
Trouble is I really need to get a car this month but I can't see that I will be able to sort it out that quickly - Does anyone know if I can put a note on my file explaining the situation and if so would it help?

Deep_In_Debt

Unfortunately, your credit file will be trashed for 6 years after the last payment on your dmp. As ddd says, you've broken the terms and conditions of your original agreement by offering reduced payments. There are ways though to re-build your rating once you have paid off your dmp but it may be best to wait a year or two before trying for credit.

Tomb Raider, I'm not really up on all this so I expect someone will correct me if I am wrong, but I think the fact that you have defaulted and been on a dmp with CCCS, it may be difficult for you to get credit so soon after. Also, the disputed debt will probably still show as an outstanding debt until it is cleared or written off.

It's worth writing to them though and see what happens - if you don't ask you don't get!

good luck

tomb_raider

Deep_In_Debt wrote: »

Unfortunately, your credit file will be trashed for 6 years after the last payment on your dmp. As ddd says, you've broken the terms and conditions of your original agreement by offering reduced payments. There are ways though to re-build your rating once you have paid off your dmp but it may be best to wait a year or two before trying for credit.

Tomb Raider, I'm not really up on all this so I expect someone will correct me if I am wrong, but I think the fact that you have defaulted and been on a dmp with CCCS, it may be difficult for you to get credit so soon after. Also, the disputed debt will probably still show as an outstanding debt until it is cleared or written off.

It's worth writing to them though and see what happens - if you don't ask you don't get!

good luck

Thanks 'Deep in Debt' but what I meant was - shouldn't the default show that it is (or was) on a DMP or at least show that payments were being made? as far as I can see it just looks like I defaulted on them and paid nothing on one and most on another (which is the same account) and on the disputed debt (Lowells) that I only paid a small amount.
I understand that they will show for 6 years but if they never show that some or all has been paid how will my credit ever be any good.
Also, I know it's soon to be trying for credit but I HAVE to get a car - my 14 year old Escort is not going to get through the MOT this month! So if I have to get a high rate car loan then that's what I'll have to do. Will that help my credit rating if I repay that properly?
I'm considering getting a credit card too after reading threads on here, and making payments in full each month to that.
I am going to write to the 3 creditor accounts though and see if they will do something on the credit reference agencies.
Sorry - I've waffled on

MrsTinks

They won't show payments have been made but once settled should within a couple of months be updated to show this. If not then contact the creditor and ask them to update the credit file to reflect that it has been settled. A debt should also only really show once.
I doubt you will even get a high APR loan I'm afraid - even if your credit file was correct. Also you might have covered this but my pregnant brain is a little hazy - if you are still on the DMP you are NOT allowed to take out any more credit - it would be breaching the conditions you in effect agreed to with your creditors and any remaining creditors could/would get quite upset if you got new credit and probably stick charges back on etc.

As for the 6 years - even if they don't update them as settled they will stop affecting your score 6 years after they went on, settling them will only help reduce the impact they have until then. Once you are 6 years from when they went on you can start to rebuild your score gradually.
Well you could start say at 5 years with high APR credit cards with low limits and repay in full each month.

tomb_raider

MrsTine wrote: »

They won't show payments have been made but once settled should within a couple of months be updated to show this. If not then contact the creditor and ask them to update the credit file to reflect that it has been settled. A debt should also only really show once.
I doubt you will even get a high APR loan I'm afraid - even if your credit file was correct. Also you might have covered this but my pregnant brain is a little hazy - if you are still on the DMP you are NOT allowed to take out any more credit - it would be breaching the conditions you in effect agreed to with your creditors and any remaining creditors could/would get quite upset if you got new credit and probably stick charges back on etc.

As for the 6 years - even if they don't update them as settled they will stop affecting your score 6 years after they went on, settling them will only help reduce the impact they have until then. Once you are 6 years from when they went on you can start to rebuild your score gradually.
Well you could start say at 5 years with high APR credit cards with low limits and repay in full each month.

Thanks 'MrsTine'
No, I'm not still on the DMP - it finished last November.
Am I right in thinking from what you say that I shouldn't apply for a credit card until 5 years from now? I thought it was 'good' to get a card and repay it in full every month to rebuild your credit rating. I don't really want a card but was going to get one for that reason.
(I think it's unfair I can't get a car loan as for the last 5+ years I've been paying £300+ a month rising to £500+ a month at the end - every month without fail.)

Peekay32

tomb_raider wrote: »

Also, I know it's soon to be trying for credit but I HAVE to get a car - my 14 year old Escort is not going to get through the MOT this month! So if I have to get a high rate car loan then that's what I'll have to do. Will that help my credit rating if I repay that properly?

How much cash do you have spare? What about assets that you could pop on ebay? Is working OT possible this month?

tomb_raider

Peekay32 wrote: »

How much cash do you have spare? What about assets that you could pop on ebay? Is working OT possible this month?

Hi - I have £500 & should have another £200 at next pay day, if I work o/t this month - won't get that pay until next month.
Don't have many assets to sell as been paying so much for the last 5 years - everything needs replacing now, just have to prioritise so the car is first as need it to get to work!
It's a vicious circle!!:eek:

Donedoingdebt

tomb_raider wrote: »

I understand that they will show for 6 years but if they never show that some or all has been paid how will my credit ever be any good.
A

As long as you have a default on your file, then you'll be very lucky to get any decent credit deals.

These defaults last for 6 years from default date & therefore, your credit worthiness is adversely affected for all that time.

After the 6 years has passed, the default will be removed from your file along with ALL details of the account.

Therefore, whether you've made no payments at all or paid regularly during those 6 years, there will be no record of this left on your file.

This will be the most realistic point at which to start rebuilding your credit worthiness.

tomb_raider

Donedoingdebt wrote: »

As long as you have a default on your file, then you'll be very lucky to get any decent credit deals.

These defaults last for 6 years from default date & therefore, your credit worthiness is adversely affected for all that time.

After the 6 years has passed, the default will be removed from your file along with ALL details of the account.

Therefore, whether you've made no payments at all or paid regularly during those 6 years, there will be no record of this left on your file.

This will be the most realistic point at which to start rebuilding your credit worthiness.

Thanks (I think!) - I mean thanks for the reply but it's not pleasant reading. I thought that when the DMP was paid off then we'd be ok. I don't ever remember reading anywhere that it would take another 6 years or in my case 4 years from now as the defaults were in 2007.
You say I won't get any decent credit - do you mean I will be able to get credit but at a high rate? If I've got to wait another 4 years then my old car definitely won't last that long. Might be able to drag it through the MOT one more time but doubt if it would even make it to the next one after that!
Really appreciate all the replies here - thanks