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Blogging for Change Blogging For Change
by Jesse Campbell on March 11, 2014

what to do when you've completed your DMP

Ask the Experts: What should I do after my Debt Managment Plan is over?

“I am a few months away from paying off my credit card debt under my current DMP. What are the next steps in reestablishing credit with a couple credit card accounts? Will having had a DMP have any adverse effect on my future credit needs?” –Neil

To get a real expert answer to Neil's question, I turned to Support Counselor Jason Rabalais. Jason works out of our Baton Rouge office and has years of experience helping consumers successfully navigate debt through the use of a Debt Management Plan (DMP).

Hi Neil,

Congratulations on paying off your credit card debt! Many of our clients have concerns about their credit and the effect that our program has on it. Not to worry! As you know our program does not do any reporting directly to the credit bureaus. However, many of our clients leave our program with a higher score than when they started. This is because accounts paid through a DMP receive consistent and on-time monthly payments every month for the length of the program. Nearly one-third of your credit score is based on making timely payments and the improved score is a side effect of success in our program.

After successfully completing a DMP, there are a few things that you can do to re-establish your credit. First, pull a copy of your current credit report. You can do this absolutely free at AnnualCreditReport.com. You want to make sure that there are no items that shouldn’t be there or any incorrect entries. If you find any, these can be disputed and will be removed if determined to be incorrectly reported.

Next, take out a card with a smaller limit and use it. This seems counter to what you worked so hard for here at MMI but using credit is one of the only ways to improve your score. The best way to handle your new credit is to pay off your balance every month, however if you can’t pay your charge in full, never use more than half of your card limit. If you have a $3000.00 credit limit, don’t let your balance grow to over $1500.00. Anything over half will have the card report on your credit as being maxed out and lower the score.

Finally, make all of your payments on time. This includes mortgage and rent payment, insurance payments, phone bills, utilities, etc. Moderation is the key when it comes to using and repaying credit. For more information on how credit works and how to build a strong credit history, check out our free eBook Getting the Credit You Deserve.

Congratulations again!

Comment(s)

Gabby says:
June 12, 2014

Well I have done the cccs way and completed paying that back in 1998.. However I was let go in 2007. I used my 401(k) (sorry Suze Orman) as I had to and I did it wisely for payments etc. I am still not working and it is 2014. My credit card debt is around $15,000 and I have no monies. I am at 0. I was on a payment protector until April but could not begin paying the monthly amount from April 2014. CCCS could not help me as I was not working. Trried through my State but they decided that it was not an emergency so they could not help me. I wanted someone other than me to write a letter etc. I have heard on the many articles that are out there that companies do a background check and they look for things like this for not hiring. To me if I am not a criminal a future employer should not make a hire decision on this information unless I have a criminal background which I do not. Not sure if you can help me but can you try? I had from Credit Karma a score I think of 655 back from Nov 2013. I am afraid to look now. How do I protect myself from being penalized? Gabby



James Wothke says:
March 14, 2014

I would like to receive information by mail or etc. on how to go about improving my credit report. I expect to finish my payments with your services this coming summer. Thank you.



Jesse says:
April 04, 2014
Website: MoneyManagement.org

Congratulations Ray! Yes, definitely check with your creditors to verify that all accounts are showing as closed and paid in full. Chances are good they were all closed at the start of your DMP, but it never hurts to check. Congratulations again!



Ray Sisemore says:
April 03, 2014

We just completed our DMP program-thank you! Should we make sure that the credit card accounts are now closed? Some seem to close automatically.



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