The people you owe (known as your creditors) give information about your payment history to credit reference agencies. This information is known as your credit rating.
Other creditors use this information to check how likely you are to pay them back when you apply for credit. Some creditors will record that they are getting payments through a debt management plan (DMP).
How does a DMP affect my credit rating?
Some people worry that a DMP will ruin their credit rating. But your credit file will already be affected if you have missed or made late payments before your DMP started.
On a DMP you will likely be paying less than you agreed to when you took the debt out. The amount you agreed to pay is known as a 'contractual payment'. This will affect your credit file.
Credit reference agencies usually hold information about a debt until the debt is paid off. But any 'defaulted' debts will stay on your file for six years after the date of the default.
Your credit rating will not improve while you are on a DMP, but don't worry about this right now. You can focus on rebuilding your credit rating once you are debt free.
You can ask the credit reference agencies for a copy of your credit file anytime:
Will my DMP affect my credit rating?
Your DMP is not recorded on your credit file.
But because you are making lower payments than you agreed when you took out the debt, this will lower your credit rating.
Any default notices or County Court judgments (CCJs) you get will be recorded on your credit file for six years from the date you received them.
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