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How to improve your credit score after an IVA

If you’re struggling with significant levels of debt, an Individual Voluntary Arrangement (IVA) is one option to regain control of your finances. However, the lasting impact of an IVA on your future financial health, and in particular your credit score, do need to be seriously considered before entering into the IVA process.

In this guide, we explore to what extent an IVA can impact your credit rating. We also provide our top tips for rebuilding and improving your credit score after completing your IVA.

Do IVAs affect credit rating?

Yes. Entering into an IVA will certainly affect your credit rating. Unfortunately, there is no way around this.

An IVA is a form of insolvency. For this reason, by entering into an IVA, you’re signalling to credit reference agencies and creditors that you, as an individual, are insolvent. As a result, credit reference agencies such as Equifax, Experian and TransUnion will record that you have been in an IVA and this mark will stay on your credit report for six years from the day your IVA is approved.

The major lasting consequence of this is that you will likely struggle to secure credit in the immediate future. This is because your IVA mark on your credit file signals to potential lenders that you are (or have been) struggling to repay past or current debts, making you a high-risk borrower.

Naturally, this means that in the years during and immediately following your IVA, you are likely to either be rejected for credit such as personal loans, mortgages and credit cards, or face very high interest rates with any credit you are approved for.

However, it’s important to remember not to rule out an IVA simply because you’re worried about damaging your credit score. Indeed, if you’re in a position in which an IVA is a serious option, the chances are you’re probably already struggling to service your existing debts. If this is the case, your credit score is likely already being damaged.

How to rebuild your credit rating after an IVA

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What happens at the end of an IVA?

March 21, 2024

Individual Voluntary Arrangements (IVAs) typically take between five and six years to complete. When you first enter into your IVA, the end of the tunnel can feel a lifetime away. However, the truth is, if you stick to your IVA terms and conditions, time can fly by. That’s why it can be helpful to know exactly what to expect when you come to the end of your IVA, so you can prepare for the process to be formally completed. In this guide, we explore exactly what happens when an IVA is completed. This will include explaining what an IVA Certificate of Completion is and looking at whether or not IVAs can be paid off early.

An Individual Voluntary Arrangement (‘IVA’) is subject to the customer meeting qualifying criteria and gaining creditor acceptance. Initial advice is free and there is no obligation to proceed into an arrangement. Monthly IVA payments include fees and may differ to the example provided, based on the assessment made of your personal circumstances. These fees will be clearly explained to you in writing by your advisor. Debt write off amounts are subject to creditor acceptance and vary by individual.

To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.

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debthelpgenius.co.uk is a trading style of Parkfield Insolvency Ltd

Parkfield Insolvency will not charge you a fee for initial information and signposting. If you were to proceed and implement a recommended debt solution where fees are applicable, full details will be provided before setting up. Parkfield Insolvency proposes and administers Individual Voluntary Arrangements (IVAs). Advice is provided on the basis that there is reasonable contemplation of an insolvency appointment, once it is apparent that an IVA is likely to be the most appropriate debt solution. The debt solutions offered by Parkfield Insolvency Limited only apply to residents of England, and Wales.

Parkfield Insolvency is a trading style of Parkfield Insolvency Limited, Company Number 14371483, registered in England and Wales, at Dalton House, Cross Street, Sale, M33 7AR.

Peter Jackson is authorised by the Insolvency Practitioners Association to act as a Licensed Insolvency Practitioner.

To qualify for an IVA with Parkfield Insolvency, you must have a minimum of £6,000 of qualifying unsecured debt owed to two or more creditors

There is potentially a debt write off in some IVAs. However, the amount of debt written off differs for each customer depending upon their individual financial circumstances and is subject to the approval of their creditors.

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