Debt Management Plans (DMP's) - do they hurt your FICO score?

[Anonymous]

I have read Debt Management Plans hurt your FICO score, is this true?

Thanks in advance.

[haulingthescoreup]

DMP's, properly managed, do not hurt your scores:

http://www.myfico.com/CreditEducation/WhatsNotInYourScore.aspx

You do need to watch very carefully to make sure that they are paying your creditors before the due date. We've had several members here come out with worse scores (although all debt was repaid), due to the CMP consistently paying bills several days late.

Lenders are another story. Many lenders regard DMP's as credit killers. To me, they shouldn't be so harsh, because lenders actually get repaid with a DMP, as opposed to charge-offs and the slimy "negotiator" programs.

This is probably where the confusion comes from. What doesn't affect your scores may affect lenders' attitudes, and vice versa.

[marty56]

Since DMP, I was able to get a prime Visa card (National City) and the best autoloan rate my CU had to offer.

[Anonymous]

Where is a good place to go to for an advicate for my GI-NORMOUS  Private SL from Sallie Mae??We may have to walkaway from them (we REALLY dont want to !), they are just too large. Anyone!!

[MattH]

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@Anonymous wrote:

Where is a good place to go to for an advicate for my GI-NORMOUS Private SL from Sallie Mae??We may have to walkaway from them (we REALLY dont want to !), they are just too large. Anyone!!

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I suggest you repost with details in the Student Loans forum, one of the regulars there has worked for Student Loan and Financial Aid offices. Unfortunately, due to some very effective lobbying by the student loan industry the same laws that make it nearly impossible to avoid paying Federal Student loans ALSO apply to most private student loans. See this NY Times article:

http://www.nytimes.com/2008/08/24/business/24loans.html?_r=1&oref=slogin