IVA & My Credit Rating

One of the many factors people worry about when considering an IVA is what damage it will do to their credit rating and whether an IVA means that they would be “blacklisted”.

Like any debt solution, there are downsides to an IVA and your credit rating will be one of them. But if you do qualify for an IVA, you should not discount it because it will damage your credit rating. As missing payments, CCJs or mortgage defaults will already have an adverse effect on your credit rating.

For free advice about the advantages and disadvantages of an IVA please get in touch with One Advice. We will be able to provide free advice and information about a number of leading debt solutions. Call us today on 0800 019 5870.

IVA & Credit Rating FAQs

What will happen to my credit rating?
When you enter into an IVA you will be entering into a new financial agreement with your creditors. This effectively means that you are breaking the original terms with which you received credit. You will be issued with a Default Notice which will remain on your credit file for 6 years.

If you have been issued with a CCJ (County Court Judgement) this will also remain on your credit file for 6 years from the date that it was issued.

Will an IVA damage my credit rating?
Yes, an IVA will show on your credit file but will remain for just 12 months after you have completed your IVA. After this time your IVA will be completely removed from your record. The same time frame also applies to bankruptcy, unless there is a Bankruptcy Restriction Order in place which will determine how long the bankruptcy status remains on your file.

Who will be able to see my credit rating?
If you apply for credit, lenders will look at your credit file in order to determine your eligibility. It is also possible for landlords and employers to look at selected information on your credit report, which will list any rulings such as CCJS, IVAs or bankruptcy orders.

What happens at the end of my IVA, will my credit rating still be damaged?
Once you have fulfilled the terms of your IVA, you will be issued with a Certificate of Completion. The credit agencies will be updated with your status and will mark your record to show that your IVA has been completed.

In total, an IVA will remain on your credit file for six years, so it will only be on your file for one year after it has been completed. During this year you may find it hard to get accepted, and if you do it will be at a much higher interest rate.

Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)