Credit score and DMP

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iVillage Member
Registered: 07-24-1997
Credit score and DMP
2
Sun, 09-14-2008 - 12:34pm

The question of "how does a debt management plan affect your credit score" comes up fairly often here, so I thought I'd share my experience.

In July 2004, we got onto a 5-year DMP (CCCS, now MMI). One year later, when we needed to buy our first home, I got our credit report and FICO number, which was in the mid-600s (we still qualified for a 30yr fixed mortgage at 5.5%, but we didn't get the best possible rate for our HELOC).

We paid off the DMP 15 months early, in April 2008 (it was due to finish July 2009), as well as the HELOC and the one Visa that we were allowed to keep off the DMP. Currently our only debt is our mortgage and one auto loan. We have the one Visa and Amex, which are both paid in full each month.

This week I requested our credit report from all three rating agencies (Equifax, Experian, and TransUnion) from the only authorized free credit report site, www.annualcreditreport.com. (You are entitled by law to one free credit report per year.) Now, here's the rub: the credit report, which details everything, is free, but if you want to know your credit *score*, you do have to pay for it. The fees range from $5.95 to $7.95. I figured the report is good, so I can review it for errors, but the score is important, too, so I paid for it on all three sites.

And the good news is: despite having been on a DMP, I am now in the highest possible bracket with all three agencies. And the funny news is: my only negative is that I don't have *enough* available credit, because all my old credit cards were closed when I went on the DMP, and our HELOC is paid off so they don't count it, so technically all I have is $10,000 available on the one Visa I still have. But all of the credit score summaries stated (to paraphrase) that since I'm in the top bracket of scores, not to worry about it.

Just thought I'd share, for those who are very concerned that being on a DMP will harm them in the long run. For me, at any rate, there seem to be no adverse long-term effects.

Kelly

iVillage Member
Registered: 09-05-2008
Mon, 09-15-2008 - 4:21pm
Thank you for that wonderful info!
iVillage Member
Registered: 04-26-2007
Tue, 09-16-2008 - 2:28pm
Thank you for that great info. I'm with MMI too and now I trust what they told me for sure.
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