What a debt management plan means for your financial future

Entering into a debt management plan, as with any debt solution, is a big commitment which deserves careful consideration.

It’s all too easy to want to take on any solution that’s offered in an attempt to get relief from your debts, but it’s worthwhile taking a look at the bigger picture and making sure you’re aware of how your decision may impact on your financial future;

Your credit rating
If you’ve already been experiencing problems in meeting your monthly repayments then it’s likely that your credit rating has been affected.

Once your debt management company has negotiated reduced payments with your creditors then they will typically make a note on your credit file to reflect this.

If you’re unsure of the extent to which your debt problems have impacted on your credit rating then it’s advisable to request a copy of your credit report to see if it’s accurate and up-to-date.

Many people aren’t aware of what information is held about them and continue to apply for credit only to be turned down again and again. This in itself can further harm your credit score.

Life after debt management 
If your debt management plan was just a short term measure to get back on your feet again then it’s important you inform your debt management company as soon as your circumstances have improved.

The sooner you start to make full monthly repayments to all of your creditors again, the sooner your credit rating will recover.

There are many reasons why people opt for debt management including periods of illness or redundancy. Agreeing a debt management plan with your creditors demonstrates a willingness to pay off your debts and your credit rating won’t be as severely affected as with other debt solutions such as an IVA or bankruptcy.

If you’re worried about how debt management could affect your ability to get credit in the future, it’s crucial that you speak to a professional debt adviser.

To find out more about any of our debt services, call us free today on 0800 043 4747 or find out how you can benefit from a debt management plan.