Does using a debt management program make your credit worse?

[Anonymous]

From what I've heard, it's a bit like rehabbing a student loan. While you're IN the program, your credit's worth about how far a toddler could throw you soaking wet.

But once you're OUT and have "graduated," your credit's better than ever and the DMP is a plus rather than a neg.

That's what I've been told, at least. And I've heard oodles of stories about how IF you get with a GOOD DMP, and do WELL, you'll be in far better shape than you were before you needed to enroll. If you do badly, you're sunk even deeper into a morass that will take YEARS to dig out of.

I was told this, BTW, by a mortgage broker several years back and a LO at our bank (we considered it, but didn't meet the qualifications -- really, we were looking for a "quick" way to fix our credit).

As always, I think YMMV.

[marty56]

What I know to be true about DMP is that most CCCs add a TL the account is being managed through one.  Also most CCCs close the account after it is PIF and it showas up as account closed by grantor.  Most CCCs will lower interest rates and the standard now seems to be around 10%.

National City gave me a mortgage early on  DMP at a rate of 7.25 which was more to do with my low scores caused by very high CCC util and 2 recent 30 day lates caused by my transition into the DMP paying the CCC rather then me.

Last November National City gave my a Visa card with 0% BT for 15 months, 10k CL and and 13% rate which was they best I ever had.

SSFCU just gave me an autoloan for 28k at 5.4 60 months which is their best posted rate.

While I was in DMP, Sams gave me a 300 CL Sams card which now is at 3100 CL after 4 years.

I was also UD'd by AE when I entered the DMP.

You dont have to add all your CC to the program and I would try to keep the oldest account out of it.  I did that with my Cheveron card.  For some reason I didnt add it but I dont remeber why.  It probably was out of good luck I suppose.

I do not know if any of the companies I had products in DMP with will give me a CC or not.  My reason for posting the detailed info about credit I got while I was in DMP and after was to show that there is life after DMP and while some companies might reject someone because of it, others will grant them new credit at rates reflective of how they are manging their credit now.

[marty56]

I dont know about know but DMP porgrams dont allow secured debt or student loans to be added to it.  Also for some reason they didnt add my MBNA LOC to the program.  It is also possible that a CCC will kick you out of DMP.  BofA did that to me for awhile and I would out with a 120 day late on my CR.  They reason was for getting the Sams card while in DMP.  This brings up the issue about being in a DMP and not getting new credit while in it.  I dont think they cared about the mortgage though.  My guess was they wanted me to get a house so that one day they could buy the mortage and take that awy from me too.  Seriously BofA was the only company who cared about new credit but I would caution poeple who are in DMP or going to be not to open a new CCC anyway.