Impact of DMP on credit record and mortgage offers

Hopelessly_Hopeful

Having been on a DMP for three years I now have almost one year left to go until I will have paid off the balance in full without F&F and despite being charged interest (24.9% & 25.9% in 2 of the cases) by five of the creditors. I feel, dare I say, I am now looking towards the home straight as I approach the final year and can start looking to the future. When I reach the end of my DMP I am not looking for credit in terms of card or loans ever again but would like to move house (looking at reducing mortgage further) but will need another mortgage at some point so essentially still need to think of impact of credit record.

As a consequence of the DMP I now have the following two issues marked on my credit record.

1) Defaults

a. I understand that defaults go on your record for 6 years from when they are applied. As it happens these will be paid off and so presumably marked satisfied next year. I have read recently that sometimes lenders will consider you when they have been on your record for 2 years even though 4 years left to run.

2) Arrangement to Pay, Arrears and DMP markers

a. In addition to the above defaults some of the other creditors have instead marked my accounts with the above categories. As I understand it they stay on the credit record until the end of the DMP and then six years so in some cases ten years in total. That seems grossly unfair that they can have a more negative effect than a default.

I would be very grateful for any information and points of view on the above issues.


HHx

michael1983l

I think the rule of thumb with Defaults is providing they are older than 3 years and classed as satisfied then they become much less of an issue. I can't help with the DMP markers, sorry.

happy_bunny_2

I read on here that credit cards and loans search last 3 years, mortgages 6. So more of an issue with mortgages than anything else.

APs are not good as they stay on your record for 6 years from when the account is settled where defaults go 6 years from the default date.

Are the default dates reasonable for when you entered DMP?

Hopelessly_Hopeful

happy_bunny wrote: »

I read on here that credit cards and loans search last 3 years, mortgages 6. So more of an issue with mortgages than anything else.

APs are not good as they stay on your record for 6 years from when the account is settled where defaults go 6 years from the default date.

Are the default dates reasonable for when you entered DMP?

Thanks

Three defaults were after 3 months and one was 15 months later. I need information on the impact of the defaults but the more urgent issue seems to be about the other AP/DMP markers. They do look to be worse than defaults, even though someone with a default need not neccesarily have paid the balance off and yet surely APs show communication and commitment? I just cannot see the logic or equity.

HHx

happy_bunny_2

Google "ICO default guidelines". You will find it an interesting read. 15 months seems too late unless payments were reduced by a lot at that time. Maybe worth a complaint quoting ICO guidelines to get it changed.

APs are a whole other issue. Have a read of the guidelines.

Hopelessly_Hopeful

Hi

It's on my reading list for Easter thanks for that.

I was paying £165 for a 14 months, then paid £5 token payment for one month due to enormous car bill. Stepchange advised to get it done as was needed for work etc, agreement was prospective and I wrote to creditors with bill and advised forcoming payments due to budget review. Thats the month they defaulted me then payments went to £148 a month.

Any thoughts?

HHx

happy_bunny_2

Yeah, probably the reason. I would still argue unfair under ICO guidelines on not being put in worse position than someone who made no attempt to pay, as default will be with you an extra 12 months than if you just didn't bother paying at all.

Good luck

HB

Thrugelmir

You need to appreciate that a credit record is for the benefit of those offering credit terms. Not for the individual. The manner in which an individual conducts their personal financial affairs is extremely important. Individuals that have difficulties are more likely to re-offend in the future than other borrowers.

Someone making no attempt to pay could be served with a CCJ. Under the terms of the CCJ the debtor could be forced to pay a minimal amount a month. Thereby resulting in the debt remaining live for a very long time.

Hopelessly_Hopeful

Thrugelmir wrote: »

You need to appreciate that a credit record is for the benefit of those offering credit terms. Not for the individual. The manner in which an individual conducts their personal financial affairs is extremely important. Individuals that have difficulties are more likely to re-offend in the future than other borrowers.

Someone making no attempt to pay could be served with a CCJ. Under the terms of the CCJ the debtor could be forced to pay a minimal amount a month. Thereby resulting in the debt remaining live for a very long time.

Thank you but again that doesn't address any of the issues!

eyeopener2

Just popping in because this is something I have an interest in. Although I have no intention of getting any more debt, ever, it is an important issue for many in dmp land.

One I have complained about, but didn't use the ico guidelines is Tesco, who defaulted me 2 years after the start of my DMP. My payments have increased,to tesco, many times in that period as debts have been repaid and payments reallocated yet they still insisted on a default.

The reason given was that they are entitled at anytime to default if the arrears are seen as a problem (to them). But the arrears were lower than in the first 6 months! Might complain again.

Barclaycard have always maintained AP, as have M&s. Virgin defaulted immediately.

It would seem that certain lenders use it as a stick to beat you, guidelines or no guidelines. A punishment, for want of a better phrase.

E2

Thrugelmir

Hopelessly_Hopeful wrote: »

Thank you but again that doesn't address any of the issues!

A DMP in itself will impact your ability to remortgage with mainstream lenders for some years. So the date a default was registered will have little bearing in this regard.