I'm on a DMP, How Will This Affect My Credit?

A Straight Talk on Debt

A Straight Talk on Debt gives you the real deal on debt, straight from our employees and personal finance experts. Learn more about debt relief plans and how to be financially fit.

I'm on a DMP, How Will This Affect My Credit?

Rate This
  • Comments 8

We are answering our customer's top questions regarding their participation in the Debt Management Plan (DMP). We want our customers to find continued success throughout the plan by understanding what it takes to be successful.

This month's question reflects on how participating in a DMP affects your credit. This is a question we are asked quite frequently, and it is an important question.

The answer, however, is more complex, as each customer has a different situation and there are many factors that affect your credit score aside from enrolling in a Debt Management Plan (DMP). Here are some things to consider.

  • The DMP can have a negative effect on your credit.  Enrolling in a credit counseling plan can have a negative effect on your credit and limit your ability to acquire new credit while you are enrolled. While nothing can be done to fix a poor credit history, by focusing on making timely payments on your existing debt, your financial situation will improve.
  • Remarks on your credit profile.  Some creditors place a remark in the remarks section of your credit report during the program that states: "Managed by a credit counseling program;" however, it is removed upon completion of your program.
  • Credit bureau sites.  If you are looking for more information regarding your credit profile you can visit any of the following credit bureau sites:

www.experian.com   www.equifax.com   www.transunion.com

  • Financial literacy education.  It is also a great idea to take advantage of the financial literacy education and budgeting tools offered by CareOne by clicking on "Tools & Tips" and "Money Management Tools"  on the CareOne website. These tools, partnered with your CareOne DMP, will help you improve both your financial awareness and financial situation. 

Making the decision to enroll in the DMP is never easy and there are many things to consider prior to joining. In order to stay motivated, remember your end goal: to get rid of your debt and become more financially sound.

If you have a question you would like to see posted please feel free to leave it in the Comments section or, ask directly in our Ask the Expert Forum.

Your comment has been posted.   Close
Thank you, your comment requires moderation so it may take a while to appear.   Close
Leave a Comment
  • * Please enter your name
  • * Please enter a comment
  • Share
  • good article

  • We are finished with the program  May 4th, after 5 years. We are buying a house and it closes in June. Our credit score is great! We will reccomend Care One to everyone!!! Thanks! K. Maxwell

  • @kmaxwell70  That is fantastic news!  We are so happy to hear about your success! Congratulations on the house!! Best of luck to you!

  • Just to let everyone know, I have been with this program for a little over a year.  Last Augutst, I was able to refinance my house to get a better interest rate and bought a new car.  Enrolling with CareOne was the best thing I have done.  If you look at your credit report it does say that you are enrolled with a DMP, and I don't think it hurt my credit score too much.  I was still able to buy a new car with a very good interest rate. 4%.  I will be finished in 3 1/2 years and can't wait.  Life will be very good for me.  I do not use credit cards any more and haven't since I started this program; and I will continue that trend when I complete this program.

  • @blondy0813  Thank you so much for sharing your success with us! Living credit card free and participating in a DMP is not always easy; your story shows us that it can be done!

    Best of luck to you and congratulations on your upcoming achievement!

  • So if currently the accounts how deragatory on my credit report, this will go away once i finish the program and the debt is paid off, or is this a permanent hit to my credit?  I have never made a late payment and had a pretty good credit score besides the credit card debt that i enrolled in the program for.

  • Yes, this has happened to me.  I tried to get a small personal loan ($5K) to go to some training which would help advance my career and set me up to earn more.  I used my car as collateral.  But I was denied based upon the fact that I have had Credit Counseling within the past 5 years. Not my score...but due to the participation in Credit Counseling, is what the bank told me.

    Seems so counter intuitive.  After a really rough spell of no work and having to live off of Credit Cards, once back to work I made a grand effort to get on the DMP and pay everybody I owed.  I didn't go DSP, I opted to face the music and do what I had to do.  After 2+ years of extra jobs, time away from home, paying on time, above the minimums, paying off one major creditor and raising my payments to pay more than what was originally agreed to, I still don't get any credit (pun intended!) for all the hard work and sacrifice,  Just does not make sense to me!  I'm trying to do the right thing here.

    Blondy0813 - I have no idea how you were able to do all of that.  Seriously...did you use a bank for both of these transactions?  How & car loans?

    I did discuss at length with the Loan Officer at the bank.  I told him I'd like to send a letter from Care One stating how committed I have stayed to the program and to getting everyone paid.  Maybe they could move a little and make small exception.  .  I figure everything's open to negotiation, and if he didn't want to consider loaning me such a small amount, with my car as collateral, I could close my accounts and move them to a Credit Union.  He said he'd consider and go to the "higher ups" and see what they said.  So we shall see!

    My understanding is even after I've paid everyone off, the Credit Counseling stain will remain on my record.  Not sure how long.

    Don't get me wrong, I'm happy I go Care One's help and I'm super happy that I'm paying down my debt.  I feel more comfortable than I have in a long time financially.  But I'm just bummed that I'm treated like a second class citizen when I'm trying so hard.

  • Coach Suzanne and/or Blondy12 ...so can you explain to me how you are supposed to get approved for a loan when you have credit counseling history on your report?  I'm anxiously awaiting some insight on this matter.  Both a bank and a credit union have turned me down. Where does one go otherwise to get a loan?

Page 1 of 1 (8 items)
Your comment has been posted.   Close
Thank you, your comment requires moderation so it may take a while to appear.   Close
Leave a Comment
  • * Please enter your name
  • * Please enter a comment
  • Share