Is it worth Building Credit Rating While on a DMP/Default?

Will_E

So I’ve realised my cerdit score is atrocious and I’m trying to build it up with a credit building credit card, using credit ladder and loqbox.... But is it worth doing this while I’m still paying off a DMP and still have defaults showing on my file?

Everything I’ve read talk about building your credit after a DMP. Why don’t any mention doing it while paying it?

Thanks!

kwame41

Demonstrating responsible use of credit is not going do any harm to your credit profile.


I doubt it will make much of an impact on your 'overall lendability' though. Getting the defaults settled and getting off the DMP is the key.

Willing2Learn

Will_E wrote: »

So I’ve realised my cerdit score is atrocious and I’m trying to build it up with a credit building credit card, using credit ladder and loqbox.... But is it worth doing this while I’m still paying off a DMP and still have defaults showing on my file?

Everything I’ve read talk about building your credit after a DMP. Why don’t any mention doing it while paying it?

The problem is, that if you are on a DMP, it suggests that you have difficulty managing credit accounts and a monthly budget. When you are on a DMP, the main focus should be learning how to address those two issues.

Just to add, that after say a couple of years of successfully managing a monthly budget whilst on a DMP, then it might be ok, at that point in time, to apply for a sub-prime card to help with the learning curve while demonstrating a continued ability to manage a credit account.

Edit: And welcome to the forum

[Deleted User]

Your credit files could be marked that you're on a DMP - so lenders may see this when you apply for credit.

As always, ignore the score, and focus on building a credit history when you can

PRAISETHESUN

It definitely will not hurt to try and build your credit history, but you are still unlikely to get any further credit with the adverse markers on your file. Paying for services to (re)build your credit is not advisable, as these services often charge you for things you can do yourself. When the markers fall off your file, the long term management of your credit should then start to shine through and you should have no issues getting better credit

Will_E

Thanks for all the replies. To clarify, I’m not trying to apply for credit at the moment, just preparing for when the defaults drop off and I’ve paid off the DMP and I will be looking to get a mortgage... Rather than wait until then and THEN build my credit score.

MovingForwards

I am in a DMP, got a 3 year long AP marker which is showing as still ongoing even though I have paid it off (waiting the CRAs to update the files to show it's settled and the company to respond to my complaint about the AP markers), got accepted for a sub-prime credit card and it is sitting in my purse. The limit is more than I honestly thought they would give me and £50 less than I hoped I would get.

I am trying to show I am responsible now and in the future whilst my history slowly gets older (defaults and a CCJ).

Try an elegibility calculator with a soft search and see what, if any, potential card you might get, only apply for it if you are no longer the person you were and can manage money and have a bit of cash saved as emergency back up.

[Deleted User]

Again, you’re not building your score.

You need to rebuild a credit history following your DMP.

It will take a good couple of years to get it anywhere decent for a mortgage

Dandytf

OP I've had limited success in re building cleaner credit rating whilst SC DMP is running from 2012 until 20xx -anything between 1-3 years after 2020 (makes me at ease not stating mid or late 2020's)
I have posted regularly on mse with cards I have applied and been accepted for -though since I reduced work to part time,my credit applications have come to end of applying any more.
I'ts a considerable time during dmp which certainly isn;t a priority -during early of mid years .
Credit report could for example be built up in last year of dmp though I chose to go the subprime route -cap1 etc .it's worked well as I'll have quite a few years of no missed payments, keeping balances as low as possible so much so I'm working towards re paying my recent cards over next 2-3 years in time for dmp finishing.
Good luck with your choice.