Repair Credit Rating after IVA

Repair Credit Rating after IVA

After your IVA has finished your credit rating will repair naturally over time. However there are things you can do to speed this up.

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When is the Record of your IVA removed from your Credit File?

Your IVA ends once you have received your completion certificate. This will normally be 2-3 months after your payments have ended.

However the record of your IVA does not come off your credit file at the same time. It remains for a total of 6 years from the start date of the Arrangement. This is regardless of when you get your Completion Certificate.

That said you can still take action to start improving your credit rating as soon as you have your completion certificate. The things you can do are described below.

There is nothing you can do to speed up the removal of the record of your IVA from your credit file. It remains for 6 years by law regardless of when your Arrangement was completed.

Review Default Notice and CCJ Dates

It is possible that one or more of your creditors issued a Default Notice or CCJ (County Court Judgment) against you after the start date of your IVA. You can check whether this has happened by reviewing your credit file.

Where they have been issued these records also remain on your credit file for 6 years. If they were issued after the start date of your IVA they will continue to affect your credit rating after the IVA record is removed.

To avoid this you can ask the lender to change is Default Notice or CCJ issue date to no later than the IVA start date. You should make your request in writing to the lender’s Data Controller.

If you would like a template letter which can be sent to Data Controllers please contact us. We will e-mail it to you.

If the lender persists in not changing the date of their Default or CCJ you can complain to the Information Commissioner. They have the power to force the lender to make the relevant changes.

Start using a Credit Repair Credit Card

Six years after starting an IVA all records of the debts you included will be removed from your credit file. As such the file then shows no history of responsible credit usage. This situation is almost as bad as having a poor credit history.

The problem is that potential lenders have no idea whether you might be a risk to lend to or not. As such they are likely to reject any application for credit from you. This situation can be overcome by using a “credit repair credit card”.

These cards are available to people with poor credit records or no credit histories. Using one for small purchases and paying the balance in full each month will start to build up a positive history of credit usage on your file.

The interest charged by credit repair card lenders is very high. To avoid paying this make sure that you pay off the balance in full at the end of each month. Such repayments provide clear evidence of responsible credit usage.

Getting a Mortgage after an IVA

Getting a mortgage is not the same as other forms of unsecured credit. Generally speaking it will be difficult for you to to so until the record of your IVA has come off your credit file.

As such if you have completed a 5 or 6 year monthly payment IVA you probably don’t have long to wait. However if you did a full and final IVA or settled the Arrangement early you may have to put your plans on hold for a while.

After the record has come off your file you should speak to a specialist mortgage broker. Even at this stage there are only a few high street banks who will work with you and offer sensible interest rates. You will struggle to find these without a broker.

Finished your IVA and want to get a mortgage? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts

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