Debt Management plan and a mortgage?

mollie0690 · 17 April 2018 at 7:37PM

Hi - looking for a bit of advice...I have been on a DMP for a few years now i've only got about (£4000) to pay but its had an impact on my credit score. I am currently a student so unable to pay off big chucks of this but I was wondering if there was a way of improving my credit score in the mean time? I see they have credit cards to help people with poor credit but I don't know if this would be the best idea? I want my credit score to improve as my partner and I are looking to get a mortgage end of this year/start of next using the help to buy scheme. I don't want my poor credit history to ruin it for us! Any advice would be greatly appreciated!:)

Jaywood89 · 17 April 2018 at 7:47PM

I’m not an expert so take my advice with a pinch of salt, I’m sure someone with better experience will come along and help.

You need to speak to a mortgage broker. It should be free for an initial talk.

As for credit cards, you are a way off from there yet. The most important thing to do is pay off your DMP.

If you think about it if you were a lender would you want to trust large amounts of money to someone on a DMP? With £4000 outstanding?

The credit card would come into play once you have paid off the DMP, not to boost your score (which is a made up load of crap!) but to build a good repayment history. Realistically if you paid off your DMP tomorrow then you would still have a way to go to before you would be appealing to high street lenders.

There’s always options but you need to be prepared and realistic about your chances

Thrugelmir · 17 April 2018 at 7:52PM

To improve your credit record. Clear the DMP. Then let time do the rest of the healing. As there's no quick steps to rectify the past.

fatbelly · 17 April 2018 at 8:08PM

Find out what's on your credit report. Defaults are there for six years and of course will be viewed negatively. Hopefully you are several years into that already.

If any entries are 'arrangements to pay' argue that you should have been defaulted after 3-6 missed payments.

Make sure you are on the electoral roll.

There is benefit in having a credit card but make sure you pay it off in full each month as you will probably be looking at high apr/low credit limit cards without any very good 0% deals.

Once your credit history cleans up you will be a much more attractive proposition to lenders.

enthusiasticsaver · 17 April 2018 at 8:19PM

I would be wary about taking any credit cards out at the moment just in case you are rejected which will be a big red flag on your record. In fact I think you are not allowed to apply for credit if you are on a DMP.

You need to wait 6 years from the date of the first default and obviously the DMP will need to be paid off. When does your course finish?

You will obviously need to be in employment before you can apply.

mollie0690 · 17 April 2018 at 8:47PM

Thank you for all your replies. I will be a qualified mental health nurse this summer so will hopfully be in full time employment by September. So from then I hope you start paying off chucks of my debt to reduce it. I!!!8217;m annoyed I entered into a DPM in the first place but I was younger and didn!!!8217;t think it through! Thanks for all the advice guys !!!55357;!!!56832;

Debt Management plan and a mortgage?

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