Entering a DMP for the second time...how long after will my credit start to improve

tnel15

So about 2 years ago I got into a mess with payday loans. I'd just started my first job and was 18 at the time. I ended up owing around 1500 and entered a DMP. After around 4 months of payments, I came into some money and cleared my debts after a reduced settlement figure was negotiated with my creditors.
Then about a year ago I started taking out more loans and have ended up with 4 different loans and 2 credit cards totalling 4500! I've entered a DMP with step change. I haven't missed any payments on my debts this time like I did before, but I was advised to go into a DMP to sort things out.

They estimate it'll be cleared within 2 years, but I'm planning on making over payments to get it cleared sooner.

I'm not planning on getting into that mess again after its sorted. I want to start enjoying life and not worrying about this kind of thing. The only debt I want from then on is potentially a mortgage. But obviously my rating needs to be good.

So, if I clear my debts say by Xmas 2016, don't take out anymore loans, what's the best way to start to rebuild my credit rating? And based on your advice How long would it take to get to a normal credit score?

Westminster

It depends on the finer details of how each of your creditors has reported the conduct of your accounts to the 3 Credit Reference Agencies.

I would strongly expect your CRA files to have adverse information for 6 years from the end of your DMP - so Xmas 2022.

It may help you to get the £2 copies of your statutory credit files from Experian, Equifax and CallCredit / Noddle (this last one is free)

KirstyO

The best way to rebuild a credit file is to be patient. It's rubbish (I know, I'm in that situation myself) but necessary. Entering a DMP says to potential lenders that you've had debt before and not managed it properly. They need to see hard evidence that you're doing everything you can manage your finances better.


I doubt you would get access to any credit at the moment, but after this DMP is finished...


1) Make sure you're on the electoral roll for the property you live at
2) Check your credit files (Noddle is free, check this every month. Check the other two annually, £4 a year to make sure everything is correct is a small price)
3) If you are happy to try and take on credit again, get a bad credit credit card. The limit will be low and the interest high but just use it for £50 a month or something. Pay it off in full every month after a statement has been produced.
4) Be good with everything else. Anything else you are liable for, mobile phone, utility bills, rent. Never miss a payment ever again, set up DD's if you haven't already.
5) At the slightest hint of something not right, get it sorted straight away. Prevent new negative entries on your credit report and get it in the best shape possible before the 6 years come around.


This is really just my way of telling you things that I've been told. Hope it helps

RuthnJasper

tnel15 wrote: »

So about 2 years ago I got into a mess with payday loans. I'd just started my first job and was 18 at the time. I ended up owing around 1500 and entered a DMP. After around 4 months of payments, I came into some money and cleared my debts after a reduced settlement figure was negotiated with my creditors.
Then about a year ago I started taking out more loans and have ended up with 4 different loans and 2 credit cards totalling 4500! I've entered a DMP with step change. I haven't missed any payments on my debts this time like I did before, but I was advised to go into a DMP to sort things out.

They estimate it'll be cleared within 2 years, but I'm planning on making over payments to get it cleared sooner.

I'm not planning on getting into that mess again after its sorted. I want to start enjoying life and not worrying about this kind of thing. The only debt I want from then on is potentially a mortgage. But obviously my rating needs to be good.

So, if I clear my debts say by Xmas 2016, don't take out anymore loans, what's the best way to start to rebuild my credit rating? And based on your advice How long would it take to get to a normal credit score?

Good on you Tnel . I wish you luck with it. Did you see the advice I left for you on your other thread (the one where some people were rude to you unfortunately)?