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Questions asked regularly and interesting questions asked elsewhere on Beat My Debt are posted here for the benefit of all.
#681
While you are in a DMP, your creditors will record that you have not maintained your monthly payments as per your original agreement and may issue default notices against you. This will mean that your credit rating becomes worse and you are prevented from borrowing more money until the debt you already have is repaid.

This situation is not made worse because you are in a DMP. If you are struggling to repay your creditors and start to miss payments for whatever reason, your creditors will issue defaults against you which will be recorded on your credit file and make it difficult to borrow more money in the future.

Often people who go into a DMP already have a poor credit rating because they have already missed monthly payments to their creditors. If this is the case, undertaking a DMP will not make your credit rating any worse.

Although the fact that your credit rating is effected sounds bad, in fact all that is happening is that you are being prevented from borrowing more money before you have repaid what you owe now. Normally, the last thing you want to do if you have a debt problem is borrow more. In the past, you may have seen no other way to maintain your debt repayments than robbing Peter to pay Paul. Once in a Debt Management Plan, you will not need to do this and therefore the need to borrow further will go away.