A debt management plan (DMP) is an informal arrangement that isn’t recorded on your credit file in itself. However, if you are considering a DMP, it is likely that you have already encountered problems making repayments on any personal debts you may have. If that’s the case, there will already have been an impact on your credit score.
Whether or not you have signed up to a DMP, if you fail to make the monthly repayments that you agreed with a lender in full, then your credit score will suffer.
If your account is in arrears, a lender can issue a Default Notice, which stays on your credit file for 6 years and will normally have an adverse impact on your credit score.
Ideally, therefore, you should still be making at least the minimum monthly repayments you originally agreed to, even if you are making those payments through a DMP.
As a debt management company, we can negotiate with lenders on your behalf in order to get interest and penalty charges frozen. Ultimately, that means you should be able to get out of debt quicker, and that you will be able to improve your credit score more quickly than you would otherwise have been able to.