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How does a DMP affect your credit file?

Being on a debt management plan (DMP) will almost always lead to negative information being registered on your credit file. This could make it harder to obtain credit in the future. The impact on your credit file is an important consideration of a DMP but it is usually worth it to reduce monthly payments to a manageable amount.

What information could be registered against me during a DMP?

Being on a DMP will impact on your credit file because it usually means making reduced payments to your debts. There are a variety of ways that a creditor could report negative information on your file.

Payment history - DMP payments will usually be less than the normal payment on a debt, so your credit history will show that partial payments are being made towards the debts. This will happen even if a creditor is happy to accept your reduced offer of payment.

DMP flag - There isn’t a specific place in your credit report to register that you’re on a DMP.  But each account included in your DMP can have a marker added to it that shows repayments are being made through a DMP. A creditor can only add a DMP marker to your debt if they accept your offer of payment.

Defaults - If your creditor defaults your account they will add details of the default to your credit history. This will stay there for six years from the date it was entered. You may not receive a default for every debt on a DMP but it is very common for this to happen.

Courts judgments and decrees - If you receive a County Court judgment (CCJ)  (England & Wales), a decree (Scotland) or a money judgment (Northern Ireland), details of this will also be added to your credit history for six years. Court action is less common than defaults during a DMP, but it is still a risk to consider.

How long will a DMP stay on my credit history?

A DMP isn’t specifically registered on your credit file but the reduced payments could impact on a few different areas of your credit file. Details of court action, defaults or missed payments will be removed 6 years from the date it happened, even if the debt hasn’t been fully repaid.

Can I rent a property or get a mortgage while on a DMP?

Renting – Starting a new tenancy while you’re on a DMP may be more difficult because some landlords will credit-check you. They may be less willing to accept you as a tenant if you have negative information such as missed payments or defaults on your credit file. Landlords can only access your credit file with your permission, and you’ll be asked to sign a form giving your consent first.

Smaller private landlords and letting agents won’t always use information from credit reference agencies. Some will only check public records. They don’t need your permission to do this, but the information they can find will only tell them if you have a recent history of court action or insolvency – it won’t tell them about defaults or missed payments. 

Some private landlords or letting agents may still be willing to accept you as a tenant, even if you have a poor credit history. But they may ask you to provide a guarantor with a good credit rating, or a pay a larger deposit or rent in advance.

Not all landlords perform credit checks. Social landlords such as local authorities and housing associations are unlikely to look at your credit history.

Mortgages - If you don’t currently own a property then it may be more difficult to get a new mortgage while on a DMP. The outstanding debts you have will be considered as a negative factor in a mortgage application and information registered on your credit file about your debts could count against you. Another significant barrier will be having a lump sum of money available to put down as a deposit on a house.

Remortgaging - It may be harder to remortgage when on a DMP but there should be some options available. If your mortgage deal expires then your current mortgage lender will usually move you or offer their ’standard variable rate‘. This isn’t likely to be the best deal on the market, but it will mean your mortgage can continue with your current provider.

Whether you will be able to obtain a new mortgage deal will depend on a variety of factors. The amount of negative information reported to your credit history will be taken into account, but the amount of equity you have in your property and your current income will also be used to decide if a lender is willing to offer you a new mortgage. We strongly recommend getting qualified mortgage advice  if you need help remortgaging while you’re on a DMP.

Can I get car insurance, mobile phones and other household bills on a DMP?

Car insurance - Paying for car insurance by monthly instalments may involve a credit check because you’ll be signing a credit agreement. Because car insurance can be cancelled if you don’t keep up with the payments, lenders offering these credit agreements are less likely to refuse you than other types of debt. While it’s not guaranteed you’ll pass a credit check while you’re on a DMP, very few of our clients have problems getting car insurance. However, you may be charged a higher rate of interest because of your credit history, so your monthly payments could be more.

Mobile phone contracts - If you’re on a DMP it’s a good idea to keep your mobile phone costs as low as possible. New mobile phone contracts will usually involve a credit check and there’s a chance you’ll be rejected if you’re applying for a contract that includes an expensive phone and high monthly cost. If you’re looking at cheaper handsets with lower costs you may have a better chance of being approved.

Utility bills - Some utility companies may credit check you. For example, this might happen if you apply to change from a pre-payment (‘pay as you go’) meter to a credit meter where you can pay monthly or quarterly.

Can I get credit while I’m on a DMP?

It’s not a good idea to take out any further credit while you’re trying to repay your existing debts through a DMP. 

Your budget should account for all the regular costs that are likely to crop up while on a DMP, so hopefully there will be no need to borrow money to cover these.

But if you have an unexpected high expense, you may feel you need to borrow money. First, we recommend you speak to us before taking out any more debt so we can check if there any realistic alternatives, for example reducing your DMP payments or applying for a grant to help you with one-off expenses.

If you do need to take out a new credit agreement, the lender will credit-check you and because of the impact on your credit file of making reduced payments, you may be charged a higher interest rate or refused credit altogether.

Can my DMP affect the people that I live with?

Your credit history is likely to be affected by being on a DMP but it will not affect the people that you live with unless you have joint financial products. This would be something like a loan, bank account or household bills that are in joint names.

If this happens there will be a ’financial association‘ linking your credit files. This means your record of making reduced payments may affect the other persons credit file and their ability to get credit.

Will things improve once my debt is repaid?

Your credit history will start to look a lot better once you’ve repaid your debts in full. There may still be some negative information about your debts but anyone checking your credit file will see that despite your previous difficulties, you’re now debt free.

Remember all negative information such as details of missed payments or court action will be removed after six years, even if the debt is not fully repaid.  And if an account has defaulted, the debt will be removed entirely from your creditor file six years after the default even if it’s not fully repaid.

We’ve written an article about how to improve your credit file after a DMP on our blog, which provides some useful information.

How do I check my credit file?

There are three main credit reference agencies in the UK and each will allow you to access the credit history they hold on you. You can access your credit report online by going to the websites for any of these organisations.

All three will supply you with a copy of your credit file for a fee of £2, but you may be able to get it free.

Experian and Equifax will allow you to access your credit report for free, but only as a trial when signing up to their paid service.

Call credit has a service called Noddle which will allow you to access your credit history for free without time limits.


Manage your DMP online. Update creditor details or complete your annual review at a time and place to suit you, day or night.


Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2017