Should I settle DMP early with reduced settlement, or continue and pay in full?

macca5000

Hi all,

I have now been on a DMP with step change (formally CCCS) for nearly 3 years.

By my calculations I should be able to settle the DMP in full by August 2015 if I continue with the plan.

I have recently been offered an interest free loan which would allow me to settle the DMP now, albeit through a reduced settlement.

I will be looking to move house as soon as possible after leaving the DMP. Would the reduced settlement flag harm my credit score more than spending another year in the DMP?

Thanks in advance

macca5000

Oh, I should have stated that the reduced settlement amount would be around 70% of the actual total.

eyeopener2

Settle for as low as you can, don't offer 70% go in at 25% and see what happens.

Regarding your debt score, why not try and pay off with full and finals and forget about getting into anymore debt, save and change your perspective .If your after a mortgage it will take a while for all the bad stuff to work its way out so in that time save with the institution you plan on borrowing from .

If you want to improve that debt rating, get yourself a high interest credit card and pay it off religiously every month. That way your showing potential money lenders your reliability in paying it back, that's what they want to see.

That's what I would do anyway, but others no doubt will feel differently.

longtermplanner

If you are on track to repay iin full in a year or so, they certainly won't consider 25% and may not even accept 70%.

What does your credit file look like, do you debts have defaults? If they do, then a partial settlement wont make them much worse so give 70% a try.

If the debts don't have defaults, then I would suggest borrowing this money from friend, splitting between creditors equally and then paying off the rest in full. That should end your DMP wihin a few months. Then spend another year repaying your friend/relative. Then go for the mortgage.

eyeopener2

longtermplanner wrote: »

If you are on track to repay iin full in a year or so, they certainly won't consider 25% and may not even accept 70%.

.

You have to try, why wouldn't you? The cost of a few stamps and a little time could pay dividends. You never, ever assume anything with a DCA.

Start at 25 and move up, you never know when they will bite.

Sazzie23

eyeopener2 wrote: »

You have to try, why wouldn't you? The cost of a few stamps and a little time could pay dividends. You never, ever assume anything with a DCA.

Start at 25 and move up, you never know when they will bite.

Have some surprising successes at F&F's quoted on the board threads over the last year or so, I'd say its worth a try.

If you are taking the interest free loan though....do make sure you can keep the repayments, don't want to be back at square 1 in a year?

macca5000

Thanks for the advice.

After talking to Step Change I decided to check my experian credit score before deciding which course of action to take.

My current experian credit score is 964! Which they rate as excellent?!?

With that in mind I think I'll stay on the DMP till it's paid and avoid rocking the boat.