About to start DMP advise needed please on credit rating

kenneth77

hi guys

Im about to start a Debt Management Plan, i wonder if anyone would know how long after Ive finished the plan will I be able to repair my credit rating?? Im 23 yrs old and would like to get a mortgage before the age of 30 does anyone think this we be poss, also I would like to get a proper bank account too and not just a solo card account???

thanks

Miss_Marple_2

Hi - it depends how bad it is now.

Payplan advised me to get a basic bank account, but I found my credit rating was not that bad - so although I started on a basic account - I have upgraded to a 'normal' account.

Only one of my creditors gave me a default - which will be off my file in the next couple of years, and looking at my credit report, it's all 'greens' as I am being recorded as paying on time each month.

The DMP has actually made my credit file look better than it was before, and when it has finished, it will look quite good !

kenneth77

cheers i owe about 8grand my dmp starts the end of this month so Ive already got my new bank account with natwest because my old one will go cos the dmp paying off my overdraft. i have no defaults yet just a fair few missed payments

Miss_Marple_2

My basic account was with NatWest, but then after a few months, they offered to upgrade, which was great. Solo cards are good, but having a cheque book is useful, plus solos cards can't be used for train tickets.

I'm not an expert, but without any defaults, after a few months into your DMP, your credit report will look better - and after 3 years, your missed payments won't show - it seems to be that the credit report only records payments for the last 36 months. Also, I think how much of the minimum payment you are making towards each debt is significant. If it is a least 50%, most of my creditors said they wouldn't give a default - but one company did - even though I did not actually miss any payments to them, it was their policy to default me because I wasn't paying the full minimum payment, they defaulted me about 3 months into my DMP

I'm sure someone with more knowledge than me will come along with better info, I can only tell you what's happened with me, and what my credit report looks like

twisty37

As far as I am aware, a default will remain on your record for 6 years, so be aware of that in case one of your creditors does decide to default you. I am 2 months away from a Natwest default coming off my record, and it's had a serious effect on my credit rating over the last 6 years - mainly in the form of higher interest rates on an borrowings I've had since.

I'd never realised how badly a default was viewed by lenders, but its not viewed well and certainly far more seriously than missed or late payments.

Sea78

Hi

As above - defaults last 6 yrs, but you can be in a DMP for quite a while and then they default you during it - something to consider? I'm not sure if you can apply for a default to be removed once you've paid a debt in full? Is that just wishful thinking?!

OH had a CCJ (or 2) on his credit file when we got the mortgage but it didn't seem to make a difference.

Sea xxx