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Credit rating - impact of debt management plan

This advice applies to Scotland

If you're in a debt management plan (DMP), it may have an impact on your credit rating. This could mean you find it more difficult to get credit in the future.

This page explains what you need to know about how a DMP could affect your credit rating.

What is your credit rating?

When you apply for a loan or other type of credit, the lender has to decide whether or not to lend to you. Creditors use different things to help them decide whether or not you are a good risk, including a credit rating they work out from your credit reference file.

Your credit reference file is held by the three credit reference agencies and contains information about you, including how you've managed existing bank accounts and credit commitments, whether you've ever had your home repossessed and people you're financially linked to. When you apply for credit, the credit provider will search your credit reference file to see how much of a risk it is to lend to you.

Will a DMP show up on your credit file?

Your DMP may show up on your credit reference file. Some creditors may ask for a note to be put on your file to say that you have a DMP. This would reduce your chances of getting credit if you applied for it while on your DMP, as it would show you've had trouble keeping up with repayments. However, if you kept up with your DMP repayments, the DMP would look better on your credit reference file than unpaid debts or debts that you were only making infrequent payments towards.

The note may also stay on your file for a time after the DMP has ended, so you may struggle to get credit for some time afterwards.

If you miss payments on a credit debt, this is also recorded on your credit reference file. Even if you're in a DMP, your creditors may still record that you've missed payments, as you'll be paying less than you agreed to when you took out the original credit agreement. This will mean you could find it harder to get credit while you're making reduced payments and for some time afterwards.

How can you check your credit file?

You can check what information the credit reference agencies are holding about you and change any incorrect information.

Next steps

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