What impact will my IVA have on my credit file? IVA Issue
Summary: This article explores the effect of an IVA (Individual Voluntary Arrangement) on the individual's credit score and ways to rebuild it when an IVA is successfully completed.
Credit Reference Agencies
Once you enter into an IVA your credit file will be affected.
The Insolvency Service, which is the Government's department that deals with insolvencies, including IVAs, will contact the Credit Reference Agencies (CRAs). They will then add a note on your credit file stating that you are in an IVA. The IVA is then placed on the Insolvency Service's IVA register, where it will remain until it is successfully completed.
When is it removed?
The credit file, however, will have the IVA recorded on it for a period of six years, after which time the file should be updated and the note about the IVA should be removed.
It is also worth noting that there is no guarantee that it will be removed from your credit file automatically, and you should therefore send copies of your 'certificate of completion' to each of the CRAs to ensure that they do remove it from your file after 6 years.
How do I rebuild my credit score?
Make sure you are registered on the electoral roll as it boosts a credit score massively as it is a way of tracing someone even though they may move address.
Once your IVA and any defaults have passed the six-year mark and they fall off your credit file, it doesn't mean you will automatically be able to obtain credit again. Some vow never to use credit again, but good credit scores are based on good use of credit, so apart from the electoral roll comment above, it is good credit-management that will boost our credit score.
Often the only way to demonstrate good credit management is to take a form of credit such as a credit card, mobile phone or catalogue, use it regularly, never miss a payment and always stay within the agreed limit.