Leaving DMP - general help needed!!

kayleigh_c

I have decided to leave a debt management plan which i have been on for the past 2 years, i want to get the debt paid off quicker and as they take a percentage of what i pay i thought this would be easier and quicker to do myself.

I have contacted all my creditors and agreed monthly payments and that has been absoloutly fine (a lot easier than i thought!). My iddue is...........i called a few months ago about getting a mortgage but was told I wouldn’t do because I was in a debt management plan, now my credit is bad – (hence the reason I am crippling myself to get this debt paid off asap) so will I be able to get a mortgage, as I was under the impression the DMP was holding me back but realistically speaking I still have the bad credit.

I also want to improve my chances of getting a mortgage but how do you improve your credit other than making sure every debt is paid off and there is nothing outstanding? Im on the electrol roll and things like that? I just cant see any light at the end of the tunnel, im doing everything I can to pay off all debt by the end of the year but then im still gonna have bad credit and not be able to make it any better?

Any help / advice would be much appreciated!

Tixy

Hi

Glad you have decided to leave the fee charging company, and good news that your self-admin plan is working well.

The reason you wouldn't be able to get a mortgage will actually be the state of your credit report rather than specifically the DMP. Its likely to show defaults/arrangements to pay on your debts.

I'd guess some of your defaults are probably only from 2 years ago? If so they'll be on your file for another 4years yet and if this is the case your chance of getting a mortgage at the moment is likely to be low.

It is possible to get a mortgage when you have defaults but usually only by having a larger deposit than would otherwise be required and being prepared to get a higher APR than the most competitive.

All you can do to try to improve things is to pay off your debts as soon as you can. Then ensure you have some credit accounts showing on your file that you use each month and pay off (perhaps a sub-prime credit card if you don't have can't get anything else). Hopefully by the time you have saved a deposit your credit file will be better and you might have a chance at getting a mortgage.

If you haven't had copies of your credit files then its worth requesting them so you can see exactly what defaults etc are on your file.

kayleigh_c

Thanks for your response!

I just feel like im banging my head against a brick wall, i want to try and progress and get better credit but how can you when you cant get any cerdit? I would love a credit card to spend little on each month and then pay off each month just to try and make my credi report look better but i cant get one?

If im honest i dont really understand my credit report, i have logged on to experian and pay a fee of £14.99 a month just so i can keep track of it, but i have no idea what some of the things are or what they mean. My credit rating is very poor but how can i make that better? Im so frsutrated, i know this is my fault and i really wanna sort it out but i cant! Arrggghhhhh!!

Tixy

When you look at your credit report one of the main things to look at is which credit accounts show as defaulted. And then check when the default date is on those debts. Defaults stay on for 6years from the original default date. Although if you pay off in less than 6years then they then shows as satisfied defaults (which are a little bit better than outstanding ones).
You might also have accounts that are marked as arrangement to pay (AP I think on creditexpert). This shows any other creditor /potential lender that you have broken your original terms but have arranged to repay the debt. So these are also look fairly bad.

Once your debts are paid off and your defaults are marked as satisfied then you might be able to get a sub-prime credit card or if you cannot get that then you might even want to consider a cashbuilder prepaid credit card.

These articles are worth a read
Credit Rating: How it works and how to improve it
'Bad Credit' Credit Cards: Use them to rebuild credit rating

Essentially it does take time to rebuild your credit file, but if you read those at least you can make sure you are doing what you can to make it better.

kayleigh_c

Thank you, this makes more sense now!

kayleigh_c

Another question, i am sure i have a CCJ (I avoided my debt for a while before taken action, buried my head in the sand) but it doesnt seem to mention it on my credit report anywhere? Am i missing something?

Tixy

A CCJ would usually appear on your credit file for 6years from the date of the CCJ, but sometimes they don't show up.
Also if you paid the CCJ within 28days of the judgement then it doesn't appear on your credit file.

How long ago do you think you might have recevied the CCJ? One way to check for certain if you have a CCJ is to check on the registery trust online website (its costs £8 per address you search but would give you an answer).

kayleigh_c

It would have been about 2 year ago that i recieved it and i never paid it off within 28 days. Im sure i had it, basically i moved in with my friend and got all post delivered to my dads house, i avoided opening any post for months on end and was certain i had a ccj. Would it show on my file eventually if its not there now?

Tixy

It might, or it might show on your credit reports from one of the other agencies (equifax or callcredit) - you could try getting your £2 statutory report from each of them to check.

kayleigh_c

Oh god now im even more confused, i thought your credit report was the same for all companies!! Where will i get the £2 statuary report from? I had one of these not so long ago so can i still get one? Sorry for being so vague, i have been with a debt management company for so long i have never even thought about the debt!

Tixy

There are 3 credit reference agencies, experian (also called creditexpert), equifax and callcredit. They will each contain slightly different information as many creditors only report to one or 2 of the CRAs not all 3. And they don't share information between them. Experian is the most widely used, followed by equifax and then callcredit.

So to get a full picture of your credit files you would have to look at all of them. They all have ongoing subscriptions that you can sign up to or you can just request a statutory report at any time for £2 (which is just a snapshot of your file at that date). A lot of people would say its not worth havign the monthly £14.99 subscription to creditexpert as the report can be got for £2 and the score/rating they give you are fairly worthless). (Other people like to subscribe for the email alerts is sends when something changes on your file).

http://www.equifax.co.uk/Products/credit/statutory-report.html

http://www.callcredit.co.uk/stat-report-online/