Getting through an IVA is not easy. Once you come out the other side, you should feel good about the fact you did what was best by your creditors and yourself.
The hard work isn’t over just yet, however. Now comes the fiddly task of tidying up your credit file. Check out our tips to get you back on track.
This advice is strictly for those coming out of an IVA, be it a lump sum IVA or five or six-year term IVA.
The first thing you’ll need from your Insolvency Practitioner (IP) is your IVA Completion Certificate. This will be signed by your Insolvency Practitioner and is proof that your IVA is officially done and dusted.
The record of your IVA will be marked as ‘Completed’ by The Insolvency Service, which will also update its records to reflect this; once this is done, you can start the job of smartening up your credit file.
It’s a good idea to see what’s actually on your credit file first.
There are three credit reference agencies (CRAs) in the UK: TransUnion, Equifax and Experian. By law, each must offer you access to your credit report - all you need to do is visit their websites and follow the instructions.
We’d recommend that you access your credit report via all three agencies. This is because you won’t know which lenders use which agency. Compare the information in each of the three reports. They usually contain the same information, but there may be slight differences. It’s also good to remember that credit reports only stretch back around six years.
Check for any adverse information after your IVA started. There shouldn’t have been any new information added about your debts since your IVA was recorded, but you should address them immediately if there are anomalies. You can do this by contacting the relevant CRA.
It’s worth bearing in mind that not all accounts listed on the credit report will be CCA-regulated (or “lenders” to you and me). For example, your payments to your mobile phone provider (if you’re on a contract) and to utility companies can also be seen on your credit report.
Your IVA will stay on your credit file for six years from the day it started. So if your IVA lasted five years, then it will only stay on your record for a further 12 months after it ends.
Once your IVA and defaults have passed the six-year mark, you will find that they are no longer listed on your report. However, this doesn’t automatically mean that you will be left with a good credit record and be able to borrow easily again.
You’ll essentially be starting from scratch and will have to rebuild your credit score slowly. Read How to Improve Your Credit Rating for help.
Living for five or six years without any form of credit (except possibly a mortgage) is a real achievement in this day and age, and it would be understandable if you never wanted to borrow again.
However, it’s still wise to make sure that you repair your credit file to the best of your ability. You never know what’s around the corner and an improved credit rating could help with getting a mortgage after an IVA and make it easier to take out insurance and mobile phone contracts.