How long does an IVA stay on your credit file?
Usually six years.
An individual voluntary arrangement (IVA) usually stays on your credit report for six years from the date it was approved. If your IVA lasts for longer than six years, it will stay on your report until it completes.
This means, even if your IVA finishes after five years, it will stay on your credit file for another year. But, once it finishes, it will be marked as ‘complete’ rather than ‘active’.
Does an IVA make it hard to get credit?
During an individual voluntary arrangement, you can’t borrow more than £500 without getting permission from your insolvency practitioner. Even if you apply for less than £500 or get permission to apply for more, you may struggle to find a lender willing to take a risk on you with an active IVA.
Once you successfully complete your IVA, your credit file will be updated to show this. It’s still likely you’ll find it difficult to borrow with a completed IVA marker on your report. There are specialist lenders who will consider applications for credit if you’re in this position. But credit from these lenders usually comes with a high interest rate.
Once the IVA drops off your credit file, you’ll be able to start building up your credit score.
Some lenders will ask you if you’ve had an IVA in the past even after it’s fallen off your credit report. This is common practice among mortgage lenders.
It might be a good idea to give it some time after your IVA before applying for large amounts of credit. You can use this time to build up your credit score. This will demonstrate to lenders that, although you had an IVA in the past, you now pose less of a risk.
Can you remove an IVA from your credit file?
You can’t get an individual voluntary arrangement removed from your credit file before six years has passed since the date it was agreed. Even if you pay off your debt early or in a single lump sum, the IVA will stay on your credit file for six years.
The marker on your credit report will be changed from active to complete when you successfully finish your IVA. But there will be some record of your IVA on your credit report for the full six years.
An IVA will usually be removed from your credit file automatically once the six years are up. If this doesn’t happen, contact the relevant credit reference agencies and ask them to update your report. You can send them a copy of your completion certificate as evidence.
How long after an IVA can you get credit?
You can apply for credit of up to £500 during an IVA, although this isn’t usually advisable. For credit applications above £500, you’ll need to get permission from the insolvency practitioner dealing with your case.
You may struggle to find lenders willing to consider a credit application from you during your IVA, although there are some specialist companies that will.
Once you complete your IVA, there are no restrictions on the credit you can apply for. But while the IVA remains on your credit file, your chances of success may be limited. If you can find a lender willing to accept your credit application, you should expect to pay higher-than-average interest.
When the IVA falls off your credit report, you’ll need to rebuild your credit score. Once you’ve had time to do this, you should start finding you get access to better deals.
How do I build my credit rating after an IVA?
Boosting your credit rating after an IVA will take time. But there are things you can do to help the process along:
- check the information on your credit file is correct
- make sure you’re on the electoral register
- borrow small amounts from specialist lenders set up to help people rebuild their credit rating
- make repayments on time and in full to show potential future lenders you’re a low-risk customer
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