A reader asked:
“I have 6 months left on my DMP and I know my credit rating is rubbish. Will my rating improve once this is paid off?”
That’s a simple question, but it needs rather a long answer.
This article is for people who are near the end or who have already completed their Debt Management Plan (DMP).
If you are thinking of starting a DMP see How does a DMP affect your credit rating? as that covers what you need to think about.
First, well done on being so close to the end of your DMP! Although your credit rating may be bad now, it will improve and this has sorted your debt problem without the harm insolvency does to your chance of a future mortgage.
But of course you are now looking to the future and thinking about your credit rating.
Even if you don’t want to get back into debt, a good credit rating is useful if you want to rent a new place or buy a car on finance. And it’s essential if you want to get a good mortgage offer.
How has your DMP been reported on your credit record?
There are two ways a creditor can report a debt in a DMP:
- the debt may be marked as “AP”. This stands for “arrangement to pay”.
- the debt may be marked as “defaulted”. You may see a string of defaults, one a month, but you can ignore these – the only one that matters is the first default.
Some creditors may have gone the AP route and some may have defaulted the debt. And some may have originally used an AP marker than later added a default. It can be confusing, so it’s important to know exactly what your credit records say.
I recommend checking all three credit reference agencies if you are serious about finding out what is happening.
What happens at the end of a DMP?
Some of your DMP debts may already have disappeared from your credit record – this happens when the default date was more than six years ago.
For the debts that remain, when your DMP is completed:
- all the debts should have a zero balance because you don’t owe anything;
- they should also be marked as settled (if they haven’t been defaulted) or satisfied (if they have been defaulted).
Creditors update credit records once a month, so allow six weeks from the last payment before checking if all your debts to have been updated correctly.
Normally there isn’t a problem here, but it’s good to be sure. If one isn’t updated to a zero balance, check first with your DMP firm when the final payment was made. Then contact the creditor and ask why a balance is showing.
Problems such as defaults and payments in arrears matter less as they get older, see How much will my credit score change if… ? for some examples of how this works.
There isn’t a huge jump the month after your DMP finishes when some of your DMP debts are still showing.
But as the DMP becomes further in the past and as you start to get new “positive” marks, your credit score will improve more. And with zero balances and settled debts, it becomes easier to get new credit at better interest rates.
How long before the DMP debts disappear?
This depends on how the debts were marked:
- a debt with an AP marker and no default will remain on your credit file for six years from the point at which it is settled.
- a defaulted debt will remain on your credit file for six years from the default date.
Up until now you may have been pleased that a debt wasn’t marked as defaulted, because an arrangement to pay doesn’t sound as bad. But defaulted debts are going to disappear before AP debts, so you may now be wishing they had all been marked as defaulted…
Sometimes you can get this changed as the creditor has not put the correct default date on.
Read What should the default date for a debt be? – that explains what the “rules” are and how to ask for a default date to be added, or changed to an earlier one.
If this works, it can make a big difference to the time it takes for your credit score to improve.
Three ways to speed up credit file improvement
These will help your credit score to increase faster:
- “Good housekeeping” Make sure all the personal details on your credit records with each of the Credit Reference Agencies is correct: your address and previous address; no financial links with an ex; keep things generally stable, not chopping and changing accounts more than necessary; and be registered to vote (surprisingly important for your credit score!)
- Make every payment on time Be fanatical about this is for the next few years. You will kick yourself if after 18 months hard work getting your score up you pay one bill late. So set up as many payments as possible to be by direct debit so you can’t miss one – this includes gas, electricity, water and phones, not just “debt”. Be careful when you are ending a mobile contract as this is an easy one to miss – double-check with the mobile firm that you don’t owe any more and keep/print out your last bill showing a zero balance.
- Start getting “positive marks” Get a “bad credit card” and use it every month for some small routine spending and pay it off in full every month. Use a soft search tool to see whether you will be accepted for a card – you want to avoid rejected applications as they leave a bad mark on your file. These cards have horrible interest rates, but if you pay them off in full every month you never pay interest AND this gives your credit score the biggest boost.
What are your priorities?
At the end of a DMP, you must have a long list of things to spend money on: treats for the kids, a holiday, new carpet etc. Take a few months off and celebrate… but then think about your long-term priorities:
- a good emergency fund will safeguard your future – every month save part of the money you were paying into your DMP in a place you can’t dip into easily. A Credit Union account could also help with affordable borrowing if you ever need it;
- mortgage – start to overpay it if it is a repayment mortgage or get a repayment plan if it is interest-only;
- put more into a pension – if you aren’t contributing to a pension fund, find out if your employer will add extra contributions.
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Jim Thomsan says
Hello, I got into a lot of debt around 2004. I entered a debt management plan never missed a payment at all. They settled all accounts in 2012 or earlier. There were many defaults on alot of accounts a few years back. I have recently done credit checks and only have one default left which was issued in March 2010. I know this default is due to come off in March 2016, This was for a Lyods TSB credit card The defaulted balance was £2480 and this was settled on 31/03/2012. Again the default was put on the account on March 2010 so how will this affect my credit report come March 2016? Will this all still show as the account hasn’t been marked settled till March 2012? Just wondering as this account still shows all issues back to 2006 on my experian credit report. This is the only issue on any of my reports and I was hoping to apply for a mortgage later this year thinking the default will gone this March but am now wondering if it will still show since the account has not been marked settled till March 2012. Many thanks, Jim
Sara (Debt Camel) says
The simple answer is that if there is a default of March 2010 on a debt it is going to disappear in March 2016. It doesn’t matter what date you settled it.
The default date sounds very late, you could probably get the default changed to be earlier, but as this would take a month or two it’s hardly worth bothering with!
Good luck with getting your mortgage later this year!
Shirley says
I have a very poor credit score so unfortunately myself and my partner could not get a Morgage as I have a number of defaulted accounts I owe £2500 so have decided to just pay them all of with the help of my partner we were then told if my credit file is clear of debts for a year there shudnt be a problem in getting a Morgage I hope this is true as I am so worried any advice would be much appreciated thanks Shirl
Sara (Debt Camel) says
This article on getting a mortgage after a DMP may help: https://debtcamel.co.uk/dmp-mortgage/. Some lenders will consider you if the defaults are all older than 3 years and all paid off more than a year ago. But you need to talk to a broker, not just apply to high street banks.
shirley says
We are hoping to have them all paid of in the next 4 months keep my credit file clean and go back in a year I hope then they will accept us ??
Sara (Debt Camel) says
That sounds like a good plan, but as i said, go to a broker not direct to a high street bank!
Jess says
I have a question……
I went on to debt management in November 2010, I have now paid of every penny in full and all my accounts have been marked as paid in full. does this mean that November 2016 they will not affect my credit rating any longer? and subsequently my credit rating will go up?
Sara (Debt Camel) says
The date the DMP started is irrelevant, what matters is the dates the individual debts were marked as defaulted – the debts will disappear 6 years after this date. This could have been before or after your DMP started. If you think a default date looks too late, read https://debtcamel.co.uk/debt-default-date/
Marie says
Hello,
I have a question.
I am about to enter a Dmp which will last 10years. Most of my creditors have already defaulted any accounts. Will those dissappear completely after 6 years regardless of me still paying the DMP?
If so what is the point in me struggling to pay the DMP if they will dissappear after 6 years anyway? Other than knowing I will have paid every penny.
Sara (Debt Camel) says
Yes, they will disappear after 6 years, regardless of the DMP.
If you don’t get a plan to repay the debts, the creditors may go for CCJs after a few years which would wreck your credit record for another 6 years.
Have you looked at your other options? Are you buying or renting? Do you expect your finances to get better or worse over the 10 year period?
Marie says
Hello,
Thanks for your response.
That explains what I needed to know. I will be returning to work this year so my income will increase however I will then have to pay childcare fees for a few years, the cost is actually more than my earnings, so this is an expected negative.
I’m currently renting, wanting to hopefully buy in the future. I am 23 and want to completely repair my credit file for then. I have looked at other options. I do believe I qualify for a DRO however my partner doesn’t want to participate in one of those. I am on unpaid maternity leave, he is working. We do claim working plus child tax credit. Can I ask, if I was to apply for a DRO what income would they take into account? Would it be all of my partners too? He is not self employed however he has no contract and only gets paid for the work he does, which isn’t stable and varies quite a lot.
Sara (Debt Camel) says
Your partner doesn’t have to “participate” in a DRO, his income is only taken into account to makes sure you are only paying a fair share of the bills.
A 10 year DMP is too long. if you qualify for a DRO then that us going to be Much the best option – your credit will be wrecked but for only 6 years. In a DMP you couldn’t get a mortgage until after it ends. An IVA with no assets to protect is pointless.
Marie says
Okay yes that makes sense. We are sharing the bills, if not him slightly more. Will his spare income not be taken into account, after he has paid his share of the bills? currently after bills/essential living costs I have ‘less than £50’ I just want to make sure his income won’t be included in this? Making my disposable income higher…
Sara (Debt Camel) says
No his disposable income doesn’t count. Talk to a debt advisor who sets up DROs, they can go through how this works in detail.
Marie says
Thank you for your help, I appreciate it.
karen smith says
Hi
I am currently in DMP which sets to last untill 2033!! Debt is £20k various cards & loan. Defaults are showing from 2014. I am about to go on maternity leave, shall I continue as I am or look into getting an IVA or can you recommend anything els? I was just thinking that after the 6 years of defaults my credit file will be clear and I would hope to go for a mortgage ? Is this pie in the sky am I best off doing s more formal arrangement and get the debt paid to do quicker? Thanks
Sara (Debt Camel) says
A DMP that long is a very bad idea. You will NOT be able to get a mortgage when the defaults have dropped off your credit record, see https://debtcamel.co.uk/dmp-mortgage/.
You need to look at some form of insolvency. With no assets to protect, bankruptcy is a much better option for you than an IVA – see https://debtcamel.co.uk/hard-choices/iva-vs-bankrutcy/. An IVA is not better for your credit record and getting a mortgage later than bankruptcy, see https://debtcamel.co.uk/bankruptcy-iva-dro-credit-rating/.
Sutherland says
My husband and I entered into a debt management plan mid 2012 with various defaults going onto our credit files between August and December. We managed to pay over £40K back and came out of our DMP in February last year. We are now looking at buying a bigger home in 2019 if possible. Would our credit files to be cleared then to look for a mortgage or would we require to go through a broker? We do have savings and equity in our house to go towards the purchase but worried that this will effect our chances of moving on with our future. Thanks
Sara (Debt Camel) says
If the defaults went onto your credit file between Aug & Dec 2012, then they will all disappear in 2018. Leaving you free to apply for a mortgage in 2019. You should avoid applying to anyone you owed money to in the DMP.
Sutherland says
Thank you, delighted that we will be eligible to apply for a new mortgage without the past being brought up to haunt us. How quick would our credit score jump up to Green rather than the amber colour we are currently at once our defaults clear? Thanks
Sara (Debt Camel) says
That depends on what else is on your credit file but if there are no remaining defaults or CCJs then there should be an immediate improvement.
Benjamin Ford says
Our debt management scheme ended in May 2016. We are rebuilding credit using high interest cards, ensuring we pay in full each month. We have been investigating our credit reference agency records and discovered that three of the four creditors registered defaults in the year the DMP started, the fourth went down the arrangement to pay route and did not register a default, we were not aware of this when the DMP was set up. We have contacted Barclaycard by letter and telephone to ask them if they will register a default and convert the AP to DMP. Their response has been that this was the company policy at the time (2011) and nothing can be done about it now. For some reason they did record the last seven months of repayments as DMP instead of of AP.
Is there anything that we can do about this given their negative response?
Thank you.
Sara (Debt Camel) says
Send a formal complaint to them, see https://debtcamel.co.uk/debt-default-date/.
Benjamin Ford says
Thank you Sara. The letter I sent to them was detailed and specific, and I did ask Barclaycard to explain why they could not register a default if this was the case. Their written response was not at all detailed and effectively said: we have provided the correct information to the credit reference agencies. The information about company policy being applied was given in a telephone conversation with one of their customer service representatives. Whilst she was polite and seemed genuinely sympathetic to our situation it would appear that we need to increase the level of assertiveness in order to obtain a favourable response. I will resubmit the original letter with the addition of the complaint and reference to the ICO guidance you have provided. Thank you for your help.
Rita Dawson says
My DMP , which I took out over 6 years ago, will finish in a few months’ time. Over the years I have regularly received default notices from my creditors despite making regular payments. My DMP company informed me that this was normal. However, my most recent one was posted to me only a few weeks ago by a company which had ‘bought’ the debt. Contrary to my understadning from this site, i.e. that only the first default date should count, my credit record still refers to current default dates. Also, my DMP company told me that every time I would receive a new default notice it would take another 6 years to wipe it off my credit record.
Any clarification and advice as to what to do to clear up my credit record would be much appreciated. Thank you.
Sara (Debt Camel) says
The debt will disappear from your credit record 6 years after the first default date that is marked on that debt. I suggest you look at all your debts on your credit record and note down when the first default date is.
The article above has three things to do to help improve your credit record.
Gemma Ireland says
Hi I’m currently in a DMP but it should be paid off by sept 2018. There are currently 2 defaults on my file from sept 2015. After this is paid I will not owe any money to anyone. Myself and partner are hoping to get a mortgage in 2019/2020. What do u think the chances are? After the DMP has been cleared I want to spend a year trying to improve my credit. Will this help? Thank you
Sara (Debt Camel) says
Are you already saving for a deposit? You will probably do better by repaying dmp faster, then saving more quickly.
Gemma Ireland says
No I’m putting every penny into paying off the DMP and then starting on the deposit.
TVR says
Dear Sara,
I was ono a Debt management plan and completed it successfully. However my credit card lender Barclays left with status of “AP” until 2016 and after that it was sold to another lender, Now it says on credit file as “Settled” and it is still showing up on my account, I went on DMP in 2010 and completed successfully.
I went thru credit files and found my rating with equifax as in Fair with a score of 418, and experian as 999 and noddle as 628.
I tried to check myself by applying a loan and I had only “2” lenders in soft search and when I went with one of them I got a different interest rate and finally I got a letter saying loan is not approved as underwriters not Ok.
What is the situation here with regard to my profile and what measures/ actions required at my end to have a good profile and to have a normal life like others.
Regards,
TVR
Sara (Debt Camel) says
Read https://debtcamel.co.uk/debt-default-date/ and then ask Barclays to ad a default back in 2010/2011.
TVR says
Hi Sara,
Forgot to mention that in 2016 this account was sold to Link financials, Should I still go ahead and speak to Barclay card or I should ask this to Link?
Also this “AP” status was until 2015, and from 2016 – I see in file that all Green without any flag of “AP” in credit records and shows settled with a recent date.
What you suggest on this entire subject, many thanks for your valuable help and inputs, I spoke to barclay card and they asked me to contact them next friday and they will look at my account. What they said was it was sold to them and we dont control this account and as you have settled you should be fine.
Regards,
TVR
Sara (Debt Camel) says
If you want a default date added before they sold the account (and you do) then you complain to Barclays. Link then have to use the same default date as Barclays did.
Peter says
Hi Sara , thanks for writing this article and all the responses above – very very helpful. I have been on a DMP since 2016 and having just secured a new salary have upped my payments considerably meaning I will be done in 1.5 years rather than 6. This has me thinking seriously about my credit score and what I can do to repair it – it’s currently at 162 which is very poor. Realistically what would I need to get it up to to get a mortgage? Does the fact my gf already owns a property and commands a high salary help or will I still be viewed as a liability? Thanks in advance P
Sara (Debt Camel) says
You score actually doesn’t matter that much for a mortgage. Read https://debtcamel.co.uk/mortgage-recent-defaults/. Your aim has to be to pay off the DMP as soon as possible and the look for a mortgage about a year after that point. Then there will be high street lenders who won’t “see you as a liability”. but go to a broker, not direct to a lender and – of course – avoid lenders you have defaulted to. So if there is a Barclaycard in your DMP, cross Barclays off the list!
Sarah says
Hi Sara,
I started my DMP back in 2011 and it is due to end in the next two months. Barclays decided to put this as a default and appears as a default every month for the pass 7 years. Is this correct? Or should this have only defaulted when I first started the plan?
Will this be on my credit file from 6 years of finishing the DMP or should it be 6 years from the first default?
Thanks
Sara (Debt Camel) says
Once a default has been added to a debt on your credit record, another one will be added every month even if you are keeping up with the DMP payments. Even though this looks bad, the later defaults don’t matter, they aren’t counted in your credit score.
The debt will disappear six years after the first default date – can you check your credit report again, as if this was more than 6 years ago, the debt should have gone already?
Well done on having repaid all your debts!
kayley says
Hi Sara, I find this a very interesting read, I am just curious and apologies if it has already been asked, could you tell me what these abbreviations mean on my credit file are they the same as mentioned above? What effect do they have? Will they take 6 years from the date of the first one applied to ‘drop off’?
AR
DF
OK
UC
ST
Thanks,
Sara (Debt Camel) says
AR – arrangement to pay. This debt has not been defaulted and it will drop off 6 years after it is settled
DF – defaulted – will drop off 6 years after the default date
OK – not behind with payments. It will drop off 6 years after the account is closed.
UC – new entry – no data yet
ST – settled. This debt has not been defaulted so it will drop off 6 years after the settlement date.
If the AR or ST debts were in a DMP, you may want to think whether a default should have been added as this will make those debts drop off sooner. See https://debtcamel.co.uk/debt-default-date/.
kayley says
Thanks Sara, so just to clarify for example one of my debts shows the following on my credit file;
STAT U S H I STO RY
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2018 OK OK OK
2017 OK OK OK OK AR AR AR AR AR AR OK OK
2016 AR AR OK OK OK OK OK OK OK OK OK OK
2015 OK AR AR AR AR AR AR AR OK OK AR AR
2014 OK OK OK OK OK OK OK OK OK OK
Am I right in thinking I should request for a default to be added to this around February 2015 so it will drop off sooner? I clearly defaulted because stepchange advised me not to pay my debts and they would arrange a payment plan and im pretty confident I received a letter around this time to say they would have to default my account in order to arrange an arrangement to pay. Does that make sense ?
Also on one account it has ‘DT’? any ideas? And another has ‘AA’? And another ‘BB’?
Again thank you for your help
Sara (Debt Camel) says
The debt you have listed the history for – are you currently paying this through a DMP? When will it be cleared?
Feb 2015 is unlikely for a default date as that is the first time you didn’t make a full payment. Also it then goes back to OK – so were you making quite large payments to this in your DMP?
A Feb 2015 default will be there until Feb 2021, if the debt will have been settled well before then this may not be an improvement.
DT = dormant account
AA early stage arrears 1-2 months late
BB sustained arrears 3-6 months late
Miss Maro says
Hi Sara,
Firstly, thanks so much for your really easy to follow information and tips. I have a question about credit that is paid off within 6 years. I heard somewhere that if credit is taken out and repaid in full, that it is then removed from your credit report that month, rather than 6 years later. Could you clarify if this is accurate (or anything like it). I have a PayPal Credit account that will be paid off within 6 months and was curious.
Also, where do I go on the site to find out more about how long late payments matter on reports for, I know they stay showing for 6 years, but do they matter as much after time and if so, how long?
Look forward to hearing from you.
MM
Sara (Debt Camel) says
“I heard somewhere that if credit is taken out and repaid in full, that it is then removed from your credit report that month, rather than 6 years later.” no this is nonsense.
The only unusual case it does apply to is if you get a CCJ in court – then if you pay the CCJ within a month it is deleted from your credit record.
But for debts, they will stay for 6 years from the default date if there is one, or 6 years from the settlement date if there is no default date.
See https://debtcamel.co.uk/credit-score-change/ which looks at how defaults matter less as they get older – the same applies to late payments.
James cole says
Hi Sara
I have finished a Dmp recently been on it for about 5 years made my last payment on the 23rd July which was a final figure which I checked with pay plan settled it and at that time they said my plan was completed during the plan time I kept on getting statement letters from one of the creditors Halifax credit card I just thought this was automated and discarded them every month about 3 weeks after my final payment I got another letter from Halifax with an outstanding balance. so I wrote to them asking if my balance was paid in full saying I have just finished a Dmp and to stop asking me for payment. I have spoken today to a complaint manager from Halifax saying I have an outstanding balance of £166 not sure what to do now as my case with pay plan is now closed
Sara (Debt Camel) says
Ask Halifax for a statement of account for the debt. Also ask Payplan if they can confirm what they paid to Halifax.
Laura Green says
Hello,
I went onto a debt management plan in April 2010 and paid it off Feb 2018 but my credit report is showing missed/late payment -6 up-to when I paid it off. Is there anyway I can get these removed because technically I defaulted/missed a payment back in April 2010 so should they have fallen off in April 2016 or have I got confused?
Many Thanks
Sara (Debt Camel) says
You can ask for a default date to be added – see https://debtcamel.co.uk/debt-default-date/. Ask the original creditor, not whatever debt collector it was later sold to. Some creditors agree easily, so refuse – in that case you can complain to the Finanical Ombudsman.
Laura Green says
Thank you for your reply, I will contact the creditor
Natalie bates says
Hi there,
I started my DMP well over 6 years ago, no missed payments, all defaults have now been removed, credit score appears great.. I am in a completely different financial position now so a few months ago I cancelled my DMP and have agreed with the remaining creditors to pay a much higher sum personally.
Debts will be completely replayed within 18 months. At the moment our mortgage is solely in my husbands name and Ideally I would like to at some point make this joint with the aim to borrow more.
At what point will I be in a position to do so? Once debts have been fully repayed? Or would it need to be 3 years after the dmp ended? Or 3 years after the debts are settled? Would it be helpful to apply for a small credit card now (and repay monthly) to start building a better score?
Or will the debts I am now repaying myself be rebuilding my score? Or neither?!
I am also worried about ever applying for a joint mortgage having a negative affect on my husbands application?!
Any help would be greatly appreciated!
Thank you.
Sara (Debt Camel) says
Have you checked your credit score with all three credit reference agencies? See https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to this for free.
Assuming they are all great…
You need to have cleared your debts before applying for a joint mortgage. And to have done so at least 6 months before the application as the lender may want to see 6 months of bank statements and you don’t want any trace of the debts showing.
You need to avoid applying to anyone for a mortgage who you had a DMP debt to. So if you had a Lloyds credit card in the DMP, don’t apply to Halifax for a mortgage.
When does the current mortgage fix end? Why do you want to borrow more?
If your credit record is great, applying for a mortgage can’t damage your husband’s.
Adam says
Hi
If I enter a DMP but then cancel before I make the first payment and pay what is due on my debt, would the DMP still stay on my credit file?
Sara (Debt Camel) says
No. If you have never paid less or missed a payment, your credit record should not be affected.
Chris says
Hi, I have just paid off my DMP, which had 4 defaulted payday loans, only 1 logged on Experian (Mr Lender), 3Credit Cards Barclaycard,Aqua and HSBC and a Scotwest Credit Union Loan, it totalled about £16k. I defaulted on them all but it says DMP on all of the above on my credit report. Myself and my partner are currently saving for a deposit, we should have 10% come January 2021, when do you think would be the best time to apply, January? As being 12 months after I have paid all debts off? Would it be worthwhile contacting all the companies above and get them to change from DMP to default?
Any help would be much appreciated,
Thanks
Chris
Sara (Debt Camel) says
Check Equifax & TransUnion reports as well: https://debtcamel.co.uk/best-way-to-check-credit-score/. They may show other issues.
I suggest you consider payday loan affordability complaints if you borrowed from any of the lenders more than a couple of times – any refund would be nice but also if you win the default should be removed! See https://debtcamel.co.uk/payday-loan-refunds/
When did the DMP start?
Chris says
The DMP started April 2017, I will check transition and equifax
Sara (Debt Camel) says
It’s a bit marginal. You must have been making quite large DMP payments. The lenders may say you weren’t more than 6 months in arrears unil 2018…
I would talk to a broker next January and get a feel for the market then.
SCAL says
Hi
I am in DPP (Scotland), which I think is similar to a DMP? I will have paid this off by the end of July completely, it was started in 2016. I was looking to buy a house next year, likely the latter part of the year, I would go through a broker but is it likely id be accepted for a mortgage?
Sara (Debt Camel) says
are all the debts in the DPP (better known as as a DAS) showing on your credit records as defaulted prior to the DAS starting?
SCAL says
most are at the time it started, but not all – in some cases the debt has been bought over and a default started with a new company from a later date
Sara (Debt Camel) says
then you should ask the new creditor to use the same default date as the previous one. otherwise these debts will continue to show on your credit record for longer.
Susan says
Hi, I was also in a DAS that ended August last year. Most of my defaults will fall off in December this year and my credit rating has been slowly increasing. I have noticed that two store cards placed missed payment markers every month from when I entered into the debt. Will these markers now be visible from when the debt was settled? i.e. last August for another 6 years? If so, do you think the creditor would accept a request for the debt to be marked as a default instead? Hoping to get a mortgage early next year. Could you tell me what the difference is between a missed payment marker and an AP? Thanks.
Angela says
Hi Susan. It is definitely worth requesting the companies you have the store cards with, to default the accounts on the date you entered your DAS. Most creditors usually do this upon entering the DAS or soon after. I have had success doing this for a client who had been in a DAS and they creditor hadn’t issued a default for the account. The Information Commissioner released a report on Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies. Within this report it suggests that creditors should register a default when someone enters an IVA, bankruptcy or similar. It could be argued that DAS is “or similar”. Worth a try. Its better to have the default registered as it comes off your credit file after 6 years. Missed payments remain 6 years after the account is showing as settled. Good luck.
Susan says
Hi,
I just wanted to update on my journey. I wrote a letter to both store cards using the template on Debt camel and with a lot of pushing they both changed them to defaults, which meant they automatically dropped off my file. One even gave me £100 as compensation. I also noticed that American Express had marked my account in a similar way but with AP markers. They were not so nice, refusing to accept my complaint and I had to go to the Ombudsman. The Ombudsman sided with me and requested they default the account. It took over a year from original complaint to go through the ombudsman, but I am now debt free with a pristine credit file. Anyone in a similar situation check your file from top to bottom and write asking for AP or late makers to be updated to defaults. Thank you Angela and Debt Camel for all the advice, it has been invaluable.
Sara (Debt Camel) says
Thanks for the feedback!
Ashley says
Hi,
I have recently just set up a payment plan with Lowell for a debt that defaulted October 2015, the plan is due to start next week and I’ve had a notification to say there has been an account removed from my credit file and also a new account has been added (both are linked to the defaulted debt) I won’t be able to see what has been added until November report, but does this mean that the default from October 2015 will now show up on my account for an additional 6 years from the date I pay off the debt on the plan I’ve just created?
I’ve only just realised that it would have disappeared off my report next October, so now I’m wondering if I’ve made a huge mistake agreeing to pay the £300 debt?
Sara (Debt Camel) says
if there was a default date on it before, that should not be removed.
what sort of debt is this?
Cara Louise Christie says
I was in a DMP starting in 2014 and cleared by September 2016 with no missed payments. The accounts that were defaulted are now off my credit reports but my Barclaycard account is still showing as “Customer Account Update – DEBT MANAGEMENT PROGRAM The account is being paid as part of a Debt Management Program.”
I have a few questions:
– Is this correct for it still to show a DMP the present tense or is this something I can dispute with Equifax?
– Will this old DMP impact the likelihood of getting a mortgage until it drops off in Sept 2022? We have had two mortgages in principle but concerned we will be knocked back when it comes to the actual application because of this.
Thank you!
Weatherman says
Hi Cara
I think this is likely to be an ‘arrangement to pay’ or AP marker on your credit report. This will stay for six years after the account was settled (so until Sept 2022), and could slightly hurt your mortgage chances – but because it’s reasonably old, it shouldn’t matter too much.
The debt should also show as having a zero balance, and as ‘settled’ (as this one didn’t default). If it doesn’t, you should complain to Barclaycard – not Equifax. I’m not entirely sure whether it should be showing in the present tense or not, to be honest – you could always ask Barclaycard to check that for you.
It’s possible that the Barclaycard debt should have had a default marker put on it more than 6 years ago (which would mean it should no longer appear on your credit report at all!) – have a look at this article, and again, you would need to speak to Barclaycard rather than Equifax if it needs changing: https://debtcamel.co.uk/debt-default-date/
Cara Louise Christie says
Hi Sara,
Thanks so much for this – I am going to approach Barclaycard to ask them about applying the default to when I missed 3 payments back in 2014 in the hope it will come off my account. Is there anything else in particular I should say that would help my case to get the default added?
I also wanted to say thank you as I used your advice from another post and managed to get a default backdated for a bank account with Coop and that’s now been removed from my file. If I can get this Barclaycard one sorted too it will be such a milestone.
Cara
Sara (Debt Camel) says
Well you have done this before so you know what has worked then! But see https://debtcamel.co.uk/debt-default-date/ for what to say.
Cara says
It felt easier to argue the backdate with the defaults existing already. Less so asking for a default to be added…
I have sent them a message…will see what happens. Thanks!
RAM says
Hi Sara,
I have finished my DMP , During this time I didnt close one of my accounts and after finishing the DMP though it is more than 9yrs, whatever reasons they are not offering the line of credit and they cannot provide any further detail why – say that system is not showing reasons. I had defaults during or begining time of DMP on this account.
Can you pls suggest what we should do? Also IF I move this account to other bank with Switch service, this will carry the history of my account or it will only carry the information of my standing orders/direct debits etc info and payee list?
Regards,
Ram
Sara (Debt Camel) says
This is a bank account? You can use the account but they won’t give you an overdraft?
Ram says
Hi Sara,
Yes, whatever I had before or during DMP i have those features today, but they r not ready to offer any loans or credit card. No reason why or they couldnt explain.
Im thinking hence to move yo new bank opening an account- but to keep easy the affairs- can i use switch option – which will be easy to move all direct debits, any standing orders, payees list etc
My doubt is , if we go this route will there any history DMP if bank had will also be moved ?
Sara (Debt Camel) says
Well you don’t need to change your bank just to get a loan or a credit card. You can often get better deals from a different bank.
But if you want to change your bank, do use the switching service. It only moves payments, not your complete credit history.
Gary says
Hi Sara
Thank you for providing all of this advice on debt camel. Its been really useful!
I wasn’t sure if you may be able to help with my query: I have been on a DMP for a few years, and am fortunate enough to be in a position to pay off the remainder of the debts (mainly credit cards, but there is 1 personal loan).
I have no intention of ever getting a loan/credit card again! however, I have a mortgage where may be useful to shop around for better rates in the future. However, my credit score is going to be completely shot after this DMP (some partial settlements).
I will pay all the credit cards off in one go and cancel them. I was wondering whether it may be a good idea to keep some of the personal loan going rather than paying it all off straight away? The reason I ask is because it may look good on the credit file to have a history of paying off the monthly payments on time (because there is no way anyone will give me a credit card at the moment!). Or would it look better on the credit file just to clear all debts?
Thanks in advance
Gary
Sara (Debt Camel) says
Your credit score is “completely shot” because of the defaults/payment arrangements.
Partially settling the debts does NOT make this worse. It is just a flag on a record, it doesn’t affect your credit score.
Most lenders probably won’t care – and the few that do, won’t be more impressed because you haven’t settled one but carried on paying it, that would not be a sensible thing to do.
The best thing you can do is settle all the debts.
Then you can start rebuilding your credit score. Have a look at LOQBOX https://debtcamel.co.uk/loqbox/.
And after 6 months think about getting a credit builder card, see https://debtcamel.co.uk/credit-builder-cards/. But they are dangerous so make sure you use them properly and always repay in full every month.
Gary says
Thank you so much Sara for the info. It is hugely appreciated!
Ali says
Hi there,
After some advice regarding how Home Retail Group are reporting on my credit file each month.
A bit of background, I entered into a DMP in May 2016, making payments, Home Retail Group (Argos store card) are the only creditor to not default me and have been marking my credit file as “AP” up until October 2018 and ever since then its been as a “X” (missed payment).
I have complained to them about this saying that as they were aware it was a long term solution I feel that they should have defaulted my back in 2016 but regardless, I do not agree with the way they have marked me down as missing payments for the majority of the time when I have been making regular, agreed amounts within the DMP. They have come back to say “that whilst you may have been making payments towards the account, as the account is in arrears, this will report as missed payments on your credit file up until the point that the account is up to date”
Is this correct?
Many thanks in advance for your help.
Sara (Debt Camel) says
no it isn’t. Read https://debtcamel.co.uk/debt-default-date/ and send your complaint to the Finacial Ombudsman.
Kim says
Hi, I’m really hoping someone can help as I’m confusing myself reading all the comments. When my ex husband left around 12 years ago he basically left all the joint debt to me (18K). I set up a DMP and have never missed a payment and have just over 1K left. I assume this has now “fallen off” my credit file. Fast forward to now and my partner and I are trying to get a mortgage. A lot of brokers saying the same thing that if lenders see the DMP of £35 going out each month they will be reluctant to lend to us. If I settle the outstanding debt will it somehow reappear on my file and will this look worse? One broker says he is sure he can get us a mortgage but my landlord is selling up and we need to get out ASAP. Not sure what to do for the best. If I pay the debt and wait 3 months for the £35 to not appear on my statements will this be better? Hope this makes some sense!
Sara (Debt Camel) says
nothing that has dropped off your credit record will ever reappear.
But you need to check NOW what is showing on your credit records – you cannot assume they are all clear… see https://debtcamel.co.uk/best-way-to-check-credit-score/ and check with all three credit reference agencies.
Phil says
Hi
I’m about to enter into a DMP for just under 4 years starting payments end of April. Literally only just agreed it all with payplan.
My questions are, are my creditors likely to default all my debts and if so how quickly will they do this?
Secondly, under the assumption they all do default, and fairly soon after it’s all in place, say they defaults are just over 3 years old and all debt is settled, how likely am I to obtain credit after the DMP finishes and how badly will my credit file be at the end? I know my credit file will worsen in the near future but I’m trying to get some information on how it could potentially look at the end of the DMP. Not that I’m looking to obtain or even thinking of credit right now until my debts are paid off, it’s just a curious question looking to the future.
Thanks
Sara (Debt Camel) says
Can I ask how much you will be paying a month? And what the total debts are?
Phil says
So debt amounts are 32k across several creditors. Over 4 years this equates to £700 a month with payplan.
Not proud to admit this but if I’m to be honest it was all built up from a gambling addiction which I’m working through as we speak.
High amount of debts with 2 creditors of which are a credit card and a loan.
Sara (Debt Camel) says
and have you made all the minimum payments so far?
(these questions may sound irrelevant, but they aren’t – with a short DMP it is harder to guess what creditors are likely to do)
and how confident are you that the £700 will be sustainable given bills and other prices going up?
Phil says
Minimum payments so far have been impeccable up until I realised I’m going to struggle going forward so sought help before I drowned drastically.
And I’m fortunate enough to have a salary that allows me to earn more through regular overtime so sustaining that amount won’t be a struggle. If anything I am planning to pay more each month as and when I can.
Me saying that sounds as though I could of managed it myself but I needed a clear plan and help with it all as it all got too much and the payments I would of had to make if going direct would of put me at a massive risk in falling behind spectacularly . Without payplan I think my outgoings would of been at least £500 more a month which wasn’t sustainablenover the period of time they were originally agreed on so a DMP allows me to pay them off with that amount fixed so I also know where I stand if that makes sense
Sara (Debt Camel) says
and how much of this debts is loans and how much cards? Are the cards at high interest or 0%?
do you have a mortgage? Car finance?
The problem with short DMPs where you are making high payments is that often the debts won’t be marked as defaulted at all, just as being in a payment arrangement. Payment arrangments will stay on your credit record for 6 years after the debt is settled.
Which if you can clear them in 3-4 years is fine. But if it ends up much longer, then it would have been better to have had nice clean defaults right at the start, which will then vanish from your recored 6 years after the default date.
Are you saying that a lot of the debt is owed to two creditors? Is one of them your own bank – should the bank have know from your bank and possibly credit card statements that you had a major gambling problem? If the lender should have known that, they should not have increased creadit limits, overdraft limits, or given more loans…
Read https://debtcamel.co.uk/gambling-refunds-loans-cards-overdrafts/ which looks at making affordability complaints when debts have arisen because of gambling.
If you can win affordability complaints then any negative marks for the unaffordable lending are removed.
You can make affordability comnplaints in a DMP – they will just result in the DMP ending sooner.
Phil says
It’s about 50/50 cards and loans. Majority of the debt is with my own bank. So one loan at 10k and credit card 10k. APR on the credit card is 25% so fairly high. No mortgage or car finance. Car is paid off.
So am I better off extending the DMP across a longer period? Andy advice on how I can tackle markers such as AP’s and request them to default them? Not quite sure how to tackle this now as I want the damage to my credit file to be as early as possible by the sounds of things so any suggestions would be highly appreciated.
Regarding the transactions etc and affordability, the transactions itself wouldn’t of been highly noticeable as the transactions don’t come up with any form of names that represent gambling however the transactions and the extent of them alongside with the frequency (daily in my case) would of been noticeable I assume. Not getting away from the fact it was me who decided to gamble and it was me who decided to spend the money as well as deciding to request a credit limit increase and top up on the loan. Would I still have a case to be answered in that respect?
Sara (Debt Camel) says
I am afraid the best way to get a default early is not to set up a DMP but instead just not pay for 3 months. Then set up a DMP. You may find this too risky.
Really you are always best having a DMP for as short a period of time as possible. But what I was saying is be realistic.
What would the gambling transactions have shown as? They are usually clearly identified as a bank had to ensure to one under 18 pays these charges.
Phil says
To be honest, with the addiction hanging over me and opening up to my family and loved ones, leaving payments for 3 months would of signalled even more irresponsible behaviour and letters arriving through the door from the creditors wouldn’t of done me any favoursBut i understand what your advising my main aim was to act upon my debt and demonstrate I’m trying to be more responsible
Do you recommend extending my start date on the DMP as I haven’t entirely signed it off yet or sent them the documents to initiate contact with creditors with the relevant information they require.
The transactions appear on my statement as a foreign transaction in USD as it was an international site so your typical betting name such asBet 365 don’t appear on the name of the transaction it’s more like a foreign transaction merchant. So as an example one of the transactions come up as “TIRZCL-PU” that’s how the transaction appears on my statement and then obviously the amount. So not sure if that’s a clear gambling transaction they would identify but definitely the amounts and frequency they appear would suggest something isn’t right as this happened very suddenly with big amounts leaving my account and being charged onto my credit card where as my accounts were in very good order with very minimum transactions and these type of transactions have never appeared ever before I started doing it.
Sara (Debt Camel) says
I think you are in a big mess and I see that doing the right thing is a good idea for yourself and your family.
So I suggest you don’t fret about the default dates and your credit record – I am not sure these matter that much to you as once the debt is gone if you are still clean of gambling you are going to be in a great position and shouldnt need much credit for a while. So you can start saving up for things you need.
If there were a lot of these very odd transactions and you have been trying to borrow a lot more money, I think your bank should have wondered what was going on. I do think this is worth a complaint. But don’t this delay starting a DMP.
Siobhan says
I seem to forever post on here.
I have been in a DMP since March 2020, I’m paying a tiny amount, that is all I can afford right now. Have approx 9k of debt spread across all sorts. Next year I’ll be in a better position to put up my payments to £200 instead of £23 (i know such a low amount), my debts should all be paid off in around 4 years. What happens to defaults in the meantime? Some were defaulted on around five years ago. Will they just drop off my credit record? By the time my dmp finishes all defaults would be around 7 years or more
Sara (Debt Camel) says
A debt that has been marked with a default date will drop off your credit record 6 years after the default date.
But you have to carry on paying them, or settle them, unless you want to be taken to court for a CCJ – they still exist and are enforceable in court even though they aren’t on your credit record.
I guess many of these debts have been sold? In this case, you could consider leaving the DMP payments low and accumulating the extra money until you could make a settlement offer to one of the debts. they may be prepares to accept a lower offer to settle. See https://debtcamel.co.uk/debt-options/less-common/full-final/ for more about these offers.
Terry duffy says
Hi Sara, I’m 4 years into dmp with 4 defaults and one that says special arrangement. This special arrangement one is about to go into default for some reason. When this happens will the default stay on my file for 6 more years or from when it became a special arrangement.
Sara (Debt Camel) says
6 more years. I suggest you ask the creditor to backdate the default date to when the account was 3-6 months in arrears. See https://debtcamel.co.uk/debt-default-date/