How do I rebuild my credit after an IVA?
Coming to the end of an IVA is a huge achievement but the hard work doesn’t end there.
Unfortunately, an IVA will affect your credit rating and you can expect your score to sit within the 200 to 330 range at the end of your arrangement – which is rated as poor
However, there is a silver lining. Your IVA journey has proven that you can live within a budget and take responsibility for your finances, now it’s time for the next step.
It’s time to start rebuilding your credit score and begin to show creditors you’re a solid candidate for future credit.
It can be a long process but it’s always worth the work to help you achieve your future financial goals.
So, your arrangement is coming to an end. What next?
Prepare for the end
When you make your final payment towards your IVA, we’ll write to you to let you know.
Then, within six months, we’ll issue you your completion certificate. As soon as you receive this, it’s a good idea to send a copy to each of the three main UK credit reference agencies; Call Credit, Equifax and Experian.
You should also check that your IVA has been marked as completed on the Insolvency Register.
Check your score
The first step of rebuilding your credit score is to know exactly where you stand right now. You can check your credit score with either ClearScore, Equifax or Experian.
It’s also a way of making sure there are no inaccuracies on your credit file. If you do find anything that doesn’t look right, you can contact the credit reference agency to find out more.
Get on the electoral roll
Here’s a quick win for your credit score – sign up to the electoral roll at your property. It reassures lenders that you have a permanent address and is a little extra proof that you are who you say you are.
It’s also something that’s easily forgotten if you’ve recently moved to a new home. It’s straightforward to register to vote online, just visit the gov.uk website.
Be cautious
If you have a joint credit account or have made any form of financial application with someone else in the past, it may be noted on your credit report that you’re financially connected.
While this can be a great thing when you both make your payments on time and have strong credit, if your partner has poor credit, this can potentially drag down your score. If you have a joint account you don’t use with someone with poor credit, you could improve your credit score simply by closing it.
Find the best credit building options for you
Throughout the life of your IVA, however long that is, applying for credit isn’t an option. But just because your agreement is winding down, it doesn’t mean that you should rush out into the world and start signing up for every credit card going.
Making multiple credit applications – and being rejected for a low score – could harm your credit score further. Instead, you should carefully choose a credit card that’s designed for rebuilding your credit, and make sure there’s a high chance of approval before you go ahead and apply.
Taking all these steps will not only help you rebuild your credit but also safeguard your credit score for the future.
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.
Data Protection Act Registration Number – ZB399874. 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.
