Will an IVA affect to my credit rating?
 
Many people are reluctant to get an IVA and one of the reasons for this is that they are concerned about the affect it will have on their credit rating.

IVAs do affect credit ratings. However, people who are in a position where they are considering an IVA will already have damaged ratings; they have borrowed too much money and have run into financial difficulties.

An unfavourable credit rating will affect your ability to borrow. At this point though, you should not be thinking about borrowing any more money. Financial institutions may be willing to extend secured credit to people with IVAs so the damage to your credit rating isnít as severe as bankruptcy.

An IVA will assist with getting your credit rating to acceptable levels quicker than filing for bankruptcy would. If you have taken on an IVA, the information will remain on your credit report for 6 years, even though the IVA term is 5 years. After this 6-year period, all details of your IVA will be removed from your credit report. This means that you can start the process of repairing your credit rating.

It is possible to make a lump sum payment towards your IVA if you receive a windfall. This will help to repay the debt to your creditors more quickly shorten the duration of the IVA.

The IVA will be overseen by an Insolvency Practitioner who should send a copy of your completion letter to the UKís credit reference agencies. This allows the agencies to update your details, helping you to be approved for credit on favourable terms in the future.

Do you qualify for an IVA?

For more information see:
What is an IVA?



 
 
     

 

 
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