Are you Blacklisted by a Debt Management Plan?
Being Blacklisted is one of the side effects of a Debt Management Plan. The fact you start a Plan means that your ability to get credit will be negatively affected.
Included in this article:
- What does Blacklisted really mean?
- Do Does starting a Plan put you on a blacklist?
- How long are you Blacklisted for?
- Are Family Members also affected?
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What does Blacklisted really mean?
The term blacklisted is commonly used to describe someone who cannot get credit. However there is no actual Black List where your name appears. The reason you cannot get credit is simply because you have a poor credit rating.
Your credit rating will be negatively affected if you fall behind with your debt repayments. When this happens your creditors will normally record the missed payments on your credit file.
If you continue to miss payments a default notice may also be recorded. The more missed payments and defaults you get the worse your credit rating will become. This will prevent you from being accepted for new credit.
Missed payments and default notices are recorded on your credit file. This will result in your credit rating becoming poor. It is commonly known as being blacklisted. However there is no actual Black list as such.
Do you get Blacklisted if you start a Debt Management Plan?
A Debt Management Plan is an agreement with your creditors allowing you to reduce your debt payments. Even if the creditors agree to the Plan it will still result in you being blacklisted.
Your creditors will normally issue default notices against you which will be recorded on your credit file. Alternatively they may actually state you are in an Arrangement to Pay by adding the marker “AP” on your file.
These default notices and Arrangement to Pay (AP) markers will negatively affect your credit rating. In other words it will become poor even though the creditors agreed to your reduced payments. This will then prevent you from getting new credit facilities from most high street lenders.
How long does your credit rating remain poor?
You will normally remain blacklisted the entire time you are in your Debt Management Plan. As such the length of the blacklisting will depend on how long your Plan lasts. This could be a number of years.
Once you have completed your Plan your credit rating will then begin to improve. However the negative effects of the Plan are likely to continue to damage your credit rating for some time after your final payment has been made.
If defaults were issued against you these will remain recorded on your credit file for six years from the date they were put on. An Arrangement To Pay marker will remain on your credit file for 6 years from the date the debt was paid.
Once your Debt Management Plan has ended there are things you can do to help your credit rating improve. These include using a so called credit repair credit card. This will help you build up records of positive credit usage.
Are Family Members Blacklisted by your Debt Management Plan?
The fact that you have been blacklisted should not affect other members of your family or other people living with you. Each individual living in your household has their own personal credit file.
If you start a Debt Management Plan missed payments and default notices are recorded on your credit file. These issues should not be recorded on anyone else’s file. As such others are not blacklisted and their credit ratings remain intact.
However the credit reference agencies can make a mistakes. It is possible that the negative records on your file could be copied erroneously to the file belonging to a family member. If this happens it will affect their credit rating. However the problem is relatively easy to fix using a process called disassociation.
Your Debt Management Plan will result in a family member or third party being blacklisted if you have debt in joint names. In these circumstances the only way they can maintain their credit rating is by making the debt payment on time themselves.
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