Leave DMP

tiglon

I started a DMP about 2 years ago, because of payday loans - all of which have now been fully settled.

I have other debts, being repaid through the DMP, but I could comfortably cope with these without the DMP. These accounts are of course in default.

I'd like to be able to get a mortgage in the not too distant future, so I'm exploring my options with the hope of improving my credit rating as quickly as possible (even if it costs me a little more in the short term).

If I left the DMP and asked my creditors to return my accounts to normal, would they be likely to accept? If they did, would this actually help me improve my credit rating anyway?

Thanks in advance for your advice

Tixy

Not likely to make a significant improvement if you have defaults on your credit file. These will stay on for 6 years from the default dates show regardless. And starting to repay the debt under original terms won't change those on your credit file.

Once they are fully paid (if within the 6years) they'll show as satisfied which is better than outstanding defaults, and may mean you are able to get a mortgage (though probably not at the best rates and likely needing a larger deposit).

How soon were you thinking of applying for a mortgage? Will it be before the defaults drop off your credit file?

tiglon

Thanks, I feared that might be the case!

Somehow one of the credit cards is not in default, despite it still being slightly over the credit limit... but that's beside the point.

Would it not help my credit rating even a little bit if I was making regular payments again?

Is there anything else I can do to make my credit score respectable again more quickly than just continuing with the DMP?

tiglon

And yes, I would like to apply for a mortgage before the defaults disappear - the last default only started in February this year, when StepChange forgot to update Natwest with my reviewed plan.

tony_ack

Might be worth getting a credit report to see how your creditors are handling your accounts - i.e. are they showing your monthly DMP payments as missed payments (as you're not paying the full contractual amount), or are they showing as normal payments (if your creditors have adjusted the contractual amount to match the DMP agreement).

If it's the latter, then leaving the DMP won't make any difference I don't think? The defaults have already been registered, and their status won't change until the accounts are settled. A better option may be to use the cash that you're saving for the deposit for the mortgage to get partial settlements on the outstanding balances, so your debt is fully paid off when you apply for mortgages. I appreciate that it means waiting a bit longer, but you may have to wait anyway if you can't get a mortgage.

tiglon

Thanks for the advice. All the creditors who have defaulted me are showing the monthly account status as... in default.

I am not planning to apply for a mortgage while I still have unsettled defaults.

Tixy

It may well be worth trying to get the natwest default backdated.

Some people on DMPs have been succesful in writing to get late defaults backdated to within 6months of them entering the DMP by stating that the date of the default is unfair and not in accordance with ICO guidelines.