DMP advice

jones101_2

Hey

I foolishly got into debt 12 years when moving to London (cc to survive etc). Around 4 years ago I took out a DMP (payplan) and was given defaults on all 5 accounts at various times (even though i never missed payments but I accept this happens when on DMP). The outstanding amount is £11,000. Now my query is regarding paying these off early. I have read some people have paid their DMPs back at a fraction of the cost (like an early settlement which payplan have hinted at - around £3-4k in my case). Is this worth doing? The reason I ask this is I read that 'settled' accounts can make the Default notice start afresh for another 6 years? Im at a different point in my life now and would love to eventually get a mortgage etc and need to figure out the best way of taking better care of my credit score (which is a pathetic 520) in the quickest amount of time. I have more disposible income these days (as my partner has moved in so we split the bills and i earn more money - 32k) so am better off financially than when i took out the DMP. Any good advice out there? Also if the DMP was paid off (albeit at an early settlement cost) is there a cats chance in hell of the defaults getting removed (as it was because of the DMP and not missed payments)?

glentoran99

the settled notice DOES NOT make it last another 6 years, after 6 years it will drop off your credit file paid or not

jones101_2

Would the credit rating heal any better with the DMP closed and the debts (albeit partially) paid off?

DCFC79

Your score of 520 isn't seen by lenders just you. It can be a representation of your credit file so dont go thinking lenders will see the score of 520 and turn you away.

jones101_2

This is the annoying thing. The lender will see 5 defaults (even though i never missed payments) because of the DMP. Maybe a notice of correction or something to explain why?

DCFC79

jones101 wrote: »

This is the annoying thing. The lender will see 5 defaults (even though i never missed payments) because of the DMP. Maybe a notice of correction or something to explain why?

Were the defaults correct ? As in did you fail to pay x amount before you entered a dmp ?

jones101_2

All the defaults occurred when I entered the DMP. There were no missed payments. Apparently this is common for DMPs as the lower payment amount messes up the system so it triggers a default on the credit file

DCFC79

jones101 wrote: »

All the defaults occurred when I entered the DMP. There were no missed payments. Apparently this is common for DMPs as the lower payment amount messes up the system so it triggers a default on the credit file

I'd say the defaults are correct as you defaulted, you couldn't keep to the original agreement you agreed too.

jones101_2

Fair enough. So paying back the DMP earlier wouldnt have much of a bearing on healing my credit score?

glentoran99

Ignore your score


Paying it back earlier will of course look better as the debt is paid off

DCFC79

Your report is what lenders, the banks can only see and use.