DMPs and rental agreements
Current tenancies
Your current landlord may not be told about your DMP.
Rent is a ‘priority payment’.You should try to:
- Pay your rent in full, outside your DMP
- Arrange to make payments you can afford to any rent arrears
New tenancies
Starting a new tenancy on a DMP may be difficult. Some landlords check your credit file.
- They may not accept you if you have missed payments or defaults
- Landlords can only access your credit file with your consent
- They need you to sign a consent form first
Not all landlords perform credit checks.
Social landlords are less likely to look at your credit history, like:
- Local authorities
- Housing associations
Smaller private landlords and letting agents might not use CRA information. Some will check public records.
- They do not need your consent to do this
- They can find out if you had recent court action or insolvency
- It will not tell them about defaults or missed payments
Some landlords and letting agents will accept a poor credit history, but they may ask you to:
- Provide a guarantor with a good credit rating
- Pay a larger deposit or rent in advance
DMPs and mortgages
Taking out a new mortgage
It is hard to get a new mortgage on a DMP if you do not own a property.
Debts do not look good in a mortgage application.
- Debts on your credit file could count against you
- Not having a lump sum deposit is a problem too
Remortgaging
It may be harder to remortgage on a DMP.
There may be some options open to you. This depends on how long you have been on the plan.
If your mortgage deal expires:
- Your current mortgage lender will usually offer their ’standard variable rate‘
- This is likely not the best deal on the market
- But it means your mortgage can carry on with your current provider
Whether you can get a new deal depends on a few things:
- How much negative information is on your credit file
- How much equity is in your property
- Your current income
Get qualified mortgage advice if you need help remortgaging while on a DMP.
Learn how a DMP may affect your mortgage, rent or tenancy.
Car insurance and DMPs
If you make monthly car insurance payments:
- There may be credit checks when you sign a new agreement
- Your car insurance could be cancelled if you do not keep up payments
- Lenders offering these credit agreements are likely to refuse you
Very few of our clients have problems getting car insurance although:
- You may not pass a credit check on a DMP
- You may be charged a higher rate of interest
- Monthly payments could be higher
Find out more about interest and charges.
Mobile phone contracts
Keep your mobile phone costs low if you are on a DMP.
With new mobile phone contracts:
- You may be credit checked
- You may be rejected for expensive phones with high costs
- You are more likely to be approved for cheaper handsets with lower costs
Not sure if you can afford your current mobile phone contract?
Utility bills
Some companies run credit checks.
This might happen if you apply to change from a pre-payment meter to a credit meter paying monthly or quarterly.
Find out how to get help with and save money on utility bills.
Can I get credit while I am on a debt management plan?
Do not take out any more credit while trying to repay existing debts through a DMP. This risks breaching the terms of your plan.
Your budget should cover all costs that might crop up on a DMP so you do not need to borrow.
Speak to your DMP provider if you have an unexpected high expense.
- They can check if there are options other than borrowing more
- You might be able to:
- Reduce your plan payments or
- Apply for a grant
The lender will run a credit check if you do need to take out a new credit agreement.
- You may be charged a higher interest rate
- You may be refused
Can my DMP affect the people I live with?
Your DMP only affects people you have joint debts or financial products with. This includes:
- Loans
- Bank account
- Household bills that are in joint names
A ’financial association' links your credit files. This means your record of making reduced payments may affect:
- The other person’s credit file
- Their ability to get credit