How Long Will a Debt Management Plan Affect Your Credit?

How long will this program be reported on my credit report? I want to get out of debt, but I don’t to do that at the expense of my credit for the next seven years.

Lacey H.


Unlike other debt relief options, a DMP does not generate any negative info.

Comparing the credit impact of different debt relief options

Some types of debt relief hurt your credit, while others generally help it. There are two parts to a consumer’s credit profile – a credit report and a credit score. These two pieces can be affected significantly (and differently) depending on which solution you use to get out of debt.

Solution Credit Report Impact Credit Score Impact
Debt consolidation No negative remarks when done correctly Lowers credit utilization, thus it generally improves most consumer scores
Debt management plan No negative remarks when done correctly; builds positive payment history; brings delinquent accounts current Overall the affect is generally neutral or positive, although some consumers with high scores may see a slight drop when credit cards are closed
Debt settlement Each account settled will be noted as settled in full for seven years; missed payments will be noted in credit history Generally leads to significant credit score damage; expect a much lower score, unless your score is already low before you settle
Bankruptcy Noted in the public records section of your report for seven years (Chapter 13) or ten years (Chapter 7) Expect your score to drop into the mid-500s if it is not already that low

As you can see, debt consolidation and debt management are the only relief options that will not generate negative credit report information. With a debt management plan, there is some potential to see a slight drop in a consumer’s credit score as they complete the program.

The reason is that accounts included in the program will be closed once they are paid off. Closing accounts reduces the number of active, open accounts you have. It can also decrease your “credit age” which is what creditors use to measure the length of time you’ve used credit.

Credit age accounts for just 15% of the “weight” in consumer credit score calculations. So, while it is a factor that can influence your score, it’s not the most significant factor. By contrast, credit history accounts for 35% of your score. So, since a debt management plan helps consumers build positive credit history, it generally has a positive effect on scores. This is particularly true for consumers who have taken some credit damage before enrolling.

Here are a few examples of clients who say their credit has improved after being enrolled in a debt management program.