How to clean up your credit file after an IVA

posted by in Living with debt

This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved. Please visit our website for more information.

Post IVA credit file clean up

Post IVA credit file clean up

It’s a happy day when your individual voluntary arrangement (IVA) finally ends, you’re well and truly free and clear and your money is your own again.

You can also take satisfaction from the fact that you have done your best by your creditors. After all they were happy to accept the terms of the IVA and to complete the IVA you’ll have complied with the terms that were set out.

First steps

The first thing you’ll receive from StepChangeVA is your IVA Completion Certificate. The certificate will be signed by your Supervisor and is proof that your IVA is now done and dusted – Hooray!

The Insolvency Service will mark your IVA as completed and update their records accordingly; once this is done you can start the job of repairing your credit file.

How to get your credit rating back into shape

We’ve blogged a before about credit ratings and how they work. This advice is strictly for those coming out of an IVA, and it doesn’t matter if it’s a lump sum IVA or five or six year term IVA.

There are three credit reference agencies (CRAs) in the UK: Callcredit, Equifax and Experian. You’ll need to get access to your credit report from all three agencies. You can get a one-off credit report from each of the CRAs online or by post for just £2.

Once you receive the reports it’s important to check the details on all three, and compare each against the other two. It’s also good to remember that credit reports only stretch back six years.

Another important thing to look out for is any adverse information after your IVA started. Ideally you should have a clean bill of health as any issues would have been registered with the CRA prior to the start of your IVA, but if they’re showing and you’ve got issues listed after your IVA started you should address these straight away.

Remember that not all accounts listed on the credit report will be CCA-regulated companies (or “money lenders” to you and me). For example your payments to your mobile phone (if you’re on a contract) and electricity companies will also appear in your credit report.

Your IVA will show on your credit file for six years from the day it started. So if your IVA was five years long it will only be listed on your credit file for a further 12 months. The idea behind asking creditors to correct the dates on defaults is to make sure that these too will be gone within 12 months.

A clean bill of health

Once your IVA and defaults have passed the six-year mark you will find that they are no longer listed on your report. This doesn’t automatically mean that you will be left with a clean rating and be able to get credit again instantly.

Ratings-wise you’re essentially starting from scratch and will have to take time to build a credit file that is attractive to lenders. Often, the only way to do this is to take a form of credit such as a credit card, use it regularly, never miss any payment and stay within the agreed limits, as Martin Lewis explains in this article.

Upward spiral

Living for five or six years without any form of credit (except possibly a mortgage) is a real achievement in this day and age. On finishing an IVA some of you may feel that you would never want to take out credit again and that you’ve learned a valuable hard won lesson.

It’s still wise to make sure that you repair your credit file to the best of your ability. You never know what’s round the corner and credit can sometimes be useful in an emergency situation. When you take out credit it’s important that you borrow within your budget and that you have the means to repay in full.

While we make every endeavour to keep your IVA on track, please be aware that failure of an IVA may lead to your creditors petitioning for your bankruptcy. If you own your own home, please also be aware that you may need to release equity in order to pay off your debts, and remortgaging may attract higher interest rates. Your IVA may be extended for a year if remortgaging is not an option.

Matthew worked as an IVA drafter prior to working in social media. In a former life he wrote scripts for Eastenders, Emmerdale and Hollyoaks. He has 3 chickens, 2 dogs and a rabbit.

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Tags Living with debt
  • chris white

    Hi ive just made my final iva payment after 6 years.. if I ask for a credit report from Experian etc will that show up on credit file and affect me? how can I get a credit card?

    • moneyaware

      Hi Chris,

      Your IVA will show on your credit file for six years from the day it started. After that it’ll drop off your credit file.

      You can check your credit file to get an idea of your score. This will help to give you an idea for if you’ll be able to get credit.

      Kind regards,

      Jen

  • Julie

    Hi
    We have 5 payments left on our IVA we have been told we owe £1,950 which will be covered by the last 5 payments. We have had some difficulties along the way and are now quite apprehensive, because we were due to finish this month but the IVA company added extra payments using terminology and other stuff we didn’t really understand. Are they allowed at this late stage to increase payments? Extend the IVA or demand more than what we owe?
    Thanks

  • Daniel Garfinkel

    I am going to raise awareness for this, I worked for a major credit reporting agency and you won’t believe how many Americans are affected by poor credit, and how simply they can help their own situation. Do you not watch the news? People think that the banks are on their side, but in fact they’re trying to keep credit scores low so they make more from interest payments – wake up people! Mine was also affected until I got intouch with a gentle man..I told him what I wanted him to do and he got it done..email him “privateinvestigator1967@gmail.com”

  • Sean Harris

    I got accepted for a iva then it got cancelled after 30 days so never made any payments.
    But it still shows on my credit report that I’ve had a iva, will this be the case for next 6 years even though I haven’t benefited at all from a iva?

    • moneyaware

      Hello Sean,

      Thanks for your comment.

      We may need more information about this to be able to advise you, what was the reason that you didn’t proceed with the IVA and no payments were made?

      Thanks

      Becca

      • Sean Harris

        It was due to the main lender my car finance was a protected loan so i was never eligible for one.
        I think the company that dealt with it all didnt look into it properly

  • Emma

    I finished paying my IVA and it is over 6 years. It is no longer on my experian credit report. I have been saving hard for months now but have still been declined a mortgage. My IVA went against me even though it is not on my file.
    Any advice

    • moneyaware

      Hi Emma

      Sorry to hear that you’re experiencing problems getting approved for a mortgage.

      Once your IVA and defaults have passed the six-year mark you will find that they are no longer listed on your report. This doesn’t automatically mean that you will be left with a clean rating and be able to get credit again instantly.

      Ratings-wise you’re essentially starting from scratch and will have to take time to build a credit file that is attractive to lenders. Often, the only way to do this is to take a form of credit such as a credit card, use it regularly, never miss any payment and stay within the agreed limits.

      Take some time to do this, keep and eye on your credit file and you’ll see your score begin to improve, you can then reapply for a mortgage.

      I hope this helps.
      Becca

  • amanda hancock

    My IVA was terminated. I never went through with it or paid into it. Experian have removed it from my credit file but callcredit and equifax and saying it will remain on there for the remaining time untill 6 years is up. Why wont the remove it when Experian have?

    • moneyaware

      Hi Amanda,

      This is a bit of a strange one, because I’d expect all three credit reference agencies to report this the same way.

      If you started an IVA and it failed then that would usually still show on your credit file for six years from when you started. If you didn’t get to the point where the IVA started then it shouldn’t be on any of your credit reports.

      It may be worth searching for yourself on the insolvency register to see if you’re on there. Here’s the link: https://www.insolvencydirect.bis.gov.uk/eiir/.

      If you feel that the information is on your credit file in error then the credit reference agencies should update your file to make sure it’s accurate. If they don’t do this then you could consider making a complaint.

      Kind regards

      James

    • amanda hancock

      I’ve checked that and nothing in my name. I never went through with the IVA and didn’t pay into it so it was terminated. I’ve sent the letter of termination to the credit reference agencies but the 2 mentioned are still refusing to remove it. Only Experian did

      • moneyaware

        Hi Amanda,

        If you’ve pointed out an inaccuracy on your credit report and the credit reference agency hasn’t corrected it then you can “report a concern” to the Information Commissioner’s Office. Here’s a link to the relevant section of their website: https://ico.org.uk/concerns/handling/.

        I hope this helps.

        James

  • Carl

    The agency have removed my IVA but one of the loans that was in the IVA still remains on my file? they removed it and it went back on, they are now telling it needs to stay on there for 5 more years ?? Is this correct as the IVA ran for 7 years