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Credit in DMP

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EaglesFan2006
Established Contributor

Credit in DMP

I think I'm going to go the DMP route to help ease some stress on me.  I think i found a pretty reputable one.  I was wondering though if say a year from now i wanted to get a secured credit card to use to pay my cable bill or something, in an effort to build credit...is it possible to do that?  How do you build up credit in these things? 
 
Also, if I were to use this, would all the times for negatives on my report be resent to 0 and I'd have to wait another 7 years for them to delete?
Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Credit in DMP

Generally on a DMP you cannot have any new revolving credit - I don't know if that includes a secured credit card or not.  I just finished my DMP, and I just used my debit card whenever I needed a "credit card" for a transaction.   I think the idea is that you build credit by paying on time every month and lowering your balances.  It's not a quick fix, but it beats a bankruptcy, IMO.  Some of the other experts on here might have different advice.
Message 2 of 8
Anonymous
Not applicable

Re: Credit in DMP

I used Consumer Credit Counseling Services for my DMP and it was a smooth experience. I actually made my last payment in January (a year and a half early!)

I was able to secure a decent credit card after a year or so and 2 since. I am *much* more responsible than I ever was before so I don't worry about having 3. I have heard that some programs will drop you if you open any new credit so it is something you need to look into when making your decision.
Message 3 of 8
PayYouNever
Frequent Contributor

Re: Credit in DMP

The issue with a DMP is that your credit card accounts get closed, and your balance will still be considered in your UTL scoring but without the off-setting CL. So your UTL is going to be extremely high until you get these paid off.

You can get a First Premier or an Orchard Bank card while in the DMP, I did. I even kept my AMEX open; I didn't included it in the DMP because I wanted to maintain a credit card while repairing. I believe it helped offset the ULT issues.

That's the biggest hit, you basically are going to have a low 500 score until the DMP is completed.
Message 4 of 8
Anonymous
Not applicable

Re: Credit in DMP

My credit score was in the low 600's when I started and never really moved down, even though I included all my cards. I also has some student loans and another installment loan that may have helped me . My original DMP was for 5 years, I paid it off in 3 1/2 and now my scores are 710 735 and 756.
Message 5 of 8
fishbjc
Senior Contributor

Re: Credit in DMP

My DMP did NOT make me close credit cards, ONLY what was in the program.  I left two open.
 
If BofA finds that you have new credit, while in the program, they may close it down.
 
I used a company recommended by BofA.  My interest is 4% on the cc and 13% on the signature.
I'm ahead of the game.
 
You may want to call your biggest creditor and ask them who they deal with.  They often can get you better rates.  I used ClearPoint Financial.  I now pay $17.00 monthly to manage it and about $2 for the auto debit company.
 
I sleep much better at night and make extra monthly payments as cash allows.    No, your negatives up to the point of signing up will remain.  You build up credit because the DMP makes the payments on time.  Just keep a close eye on all of your statements so everything reports properly.
Message 6 of 8
fishbjc
Senior Contributor

Re: Credit in DMP

Oh, both of BofA left the original cl showing as OPEN.  I do not know if this is because I went with their DMP or not.
 
 
Message 7 of 8
marty56
Super Contributor

Re: Credit in DMP

I graduated DMP in November.  about 3 years ago, BofA found out that I got a Sams card while I was in DMP and quitely droped me from the program.  They did not contact me or the DMP company and they raised my minimum payment.  As a result of this I have a big black mark on my credit report of being 90+ days on my BofA account.
 
This is the only resaon my scores are not in the high 700's or over 800.
 
I also didnt put all my CCs into the DMP and left out a vintage 1984 Chevron card and CompUSA card which is the only reason my credit scores arent lower then they are.  The good news is that despite BofA, I was able to get new credit and in a few months my scores should be over 760 which hopefully will get me to my goal of being a "well qualified buyer" from a new car.  I called BofA a qwhile back to see if they would remove the lates and I got a very smug "We can't leaglly do that" response.  I havent sent them a GW letter and I will only do so if it affects my ability to get a new car loan.
 
In 4 more years, the info will fall off my CR.  I can wait.  I vowed that I would never use any BofA product again.  I hope they are stupid enough to send my a pre-approval letter one day and I will return it to them - after adding some of the results of my dialy "purging" ritual.  Yes I can be childish and no I wont really do it but I like thinking about it.
 
The botom line is that if you have any BofA product in DMP, do not seek new credit otherwise they will drop you from the program.  learn from my mistake.
 
Citibank, Wells Fargo, HSBC, and Providian (WaMu) didnt care about the new credit.
1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 8 of 8
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