How a Debt Management Plan can affect your credit history

A Debt Management Plan can help you pay your debts off at a rate that you can afford. But what if you want to borrow again after your DMP is completed? Your ability to borrow will depend on your credit history – so it’s important to understand the impact your DMP will have on that.

Partial payments

While your DMP is ongoing your credit file will be marked with ‘Arrangement to Pay’. This shows anyone who checks your file that you do have arrangement to pay the debt in place, even though you are paying less than the contractual amount.


If you were struggling with your repayments before you started your DMP, some or all of your lenders may already have issued defaults against you. A default means that the creditor considers the agreement you first signed when you took the credit out to be broken.

Even though your file will be marked with ‘Arrangement to Pay’ you could still end up with a default whilst your DMP is ongoing. Creditors can issue defaults at any point during your DMP but won’t issue one before you’ve built up three months’ worth of arrears. When you’re on a DMP three months’ arrears will be the difference between your old payments before the plan and your new payments on the plan.

Defaults stay on your credit file for six years from the date that you get them.


If a lender has taken you to court and got a County Court Judgment (CCJ) against you this will be added onto your credit history and will also stay there for six years. Although it’s worth saying that it’s unlikely your creditors will take court action against you once you’ve started your DMP.

When you complete your plan

Once your DMP has finished, the debt included may be noted on your credit file as ‘debt satisfied.’ In some cases it also shows the last 12 months of payments towards your DMP.

It’s important to remember that any CCJs or defaults will fall off your credit file after six years from the date that you get them. So if your DMP takes more than 6 years, any defaults and CCJs from before won’t show up there anymore.

Check your credit history regularly

If you want to apply for a mortgage or get a mobile phone contract or tenancy agreement after your DMP make sure you improve your credit score as much as you can and get any mistakes on your file corrected. That’s why it’s important to check your credit history regularly, at least every six months.

You can do this for free by using Credit Matcher from Experian, Clearscore through Equifax or Noddle which is part of Callcredit. You’ll just need to sign up to one of them and provide some details in order to check your file.

Next time, we’ll look at ways to improve your credit score once your DMP is over.

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