There is no doubt about it, an IVA will impact on your credit rating.
The question you need to ask is : For how long will an IVA effect your credit rating?
The answer to this question is 6 years.
This is because whenever something adverse, or negative, is recorded on your credit file, such as an IVA, it will remain on file for 6 years from the date it began, after which time it will be automatically removed.
As you know, by entering into an IVA you would be defaulting on your original repayment schedules to your loans, credit cards or store cards. Which means, as well as having the IVA on your record, these missed payments could also be recorded on your file as default notices or even County Court Judgements but, even if your creditors did serve these actions against you, the extra adverse remarks wouldn’t have any other detrimental effect beyond that of your IVA.
So your credit file will record your IVA for a 6 year term from the date of your creditors meeting, after which time it should be automatically removed.
Take this link to read what you should do after you have successfully completed your IVA.
In truth, though, there is minimal impact on the IVA applicant because, whilst the IVA is being conducted successfully, the IVA applicant is unable to apply for loans or request any credit as to do so would breach the terms of their IVA.
And, as you probably already know, a person’s credit report or credit file has one primary use, that is to assess the risk that person might pose to a potential lender. Therefore, at least for the duration of the IVA, there will be no need for a creditor to reference the IVA applicant’s credit file.
If your IVA successfully completes before the full 6 year term has elapsed, you are quite at liberty to search for credit should you want to.
However, whilst your credit report or credit file still shows evidence of your recent financial history, i.e. your IVA, you will find it almost impossible to find a creditor willing to lend you money.
But once the 6 years have elapsed and you have checked your credit report is clean, you should be able to begin the process of rebuilding your credit score.
For more information read this in-depth article on How an IVA will affect your credit rating
For more information about IVAs call 0800 088 7503 and speak to one of our trained advisers now.
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