Question: How Long Does A Debt Management Plan Stay On Your Credit Record?

six years

Do debt management plans hurt your credit?

Enrollment in a debt management plan doesn’t affect one’s credit score. However, certain facets of the program — timely payments, closing accounts, smaller amounts owed, and changes in utilization rate — may impact one’s score in both negative and positive ways.

Can I get a credit card while on a debt management plan?

The goal of the program is simple: no more debt. Using a credit card while you’re on a DMP makes it harder to accomplish that goal. While you’re on a DMP, cash is king. That said, depending on the circumstances you may be allowed to keep an emergency credit card (not included on your DMP) open in case of emergencies.

Is it worth getting a debt management plan?

A DMP can result in waived fees and lower interest rates, but you’ll still be paying your accounts in full when you complete the DMP. This may be better for your credit than settling debts for less than the full amount.

Can you pay off a debt management plan early?

It is possible to pay off your DMP early using a cash lump sum. Your creditors will often be willing to accept a one off cash payment and in return write off the balance of the debt. If you have been in your Plan for 6-12 months creditors will often accept a lump sum of just 50% of the outstanding balance.