Credit Rating and IVAs

Summary: This article will give an explanation of how entering an Individual Voluntary Arrangement (IVA) may affect an individual's credit rating, and what implications this could have.

When does an IVA get recorded on the credit record?

As soon as an IVA has been approved, the creditor involved will notify the Credit Agency of the situation. It will be logged immediately on the credit file.

How long will the IVA appear on the credit file?

An IVA will usually appear on an individual's credit record for a period of 6 years from the commencement date of the IVA. While most IVAs last in the region of 5 years, even after its end, there will normally be a period of 12 months before it is removed. The IVA supervisor will issue the debtor with a 'Certificate of Completion' when an IVA has successfully ended, this can be used as evidence for anyone wishing to confirm that it has been completed.

What are the implications of having an IVA on the credit record?

As it is likely (but by no means certain)that the individual already had a poor credit rating (thus the need to enter an IVA) the impact is unlikely to cause any great changes. However, having a poor credit record can have a few implications:

  • Further Credit - Should the individual wish to gain further credit, even after the IVA has been completed (assuming it is within the first year of completion), creditors may not look favourably on the fact. Even if credit is granted, it may result in higher than normal interest rates as the creditors will see it as higher risk.

  • Mortgages - As with trying to obtain further credit, mortgage companies may consider those that have an IVA on their credit record as being at higher risk. This could result in a mortgage being declined, or a higher rate of interest and/or higher level of deposit.

While there certainly are limitations, creditors tend to be more willing to lend after the successful completion of an IVA rather than Bankruptcy. This is because an IVA shows a positive effort to budget and repay as much as possible during a given time. It is also important to bear in mind that after the 6 year period, the credit agencies should wipe any reference to the IVA and previous defaults automatically. If this is not done, the individual can write to request the record is updated.

The above is provided as information only. does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.