How will an IVA affect my credit score?

Last Modified 16th of February 2021

Anyone who has ever taken out credit, whether it’s for a phone contract or a mortgage, will have a credit score. It’s essentially a record of the last 6 years of your financial history and shows lenders how likely you are to make repayments on time and how many times you’ve borrowed. But how does an Individual Voluntary Arrangement (IVA) affect your credit score? Here we show you what happens to your credit score if you do have an IVA or you’re thinking about applying for one.

How long will an IVA affect my credit rating?

An IVA will affect your credit rating for a minimum of 6 years – even if your IVA terms are for 5 years. A note is placed on your credit file telling anyone who checks it that you have an IVA. This means you can’t get any more credit but, if by some chance you do get more credit, this could breach the terms of your IVA and you could end up filing for bankruptcy. The note on your credit file starts as soon as your IVA starts.

[cta type=”debt”]

What happens to my credit score after I’ve paid off my IVA?

The IVA stays on your credit record for a while even after your debts are paid, which can make it difficult (but not impossible) to borrow again – especially if you want a mortgage. You’ll need to build up your credit rating again over the long-term to prove to lenders you’re a responsible borrower capable of making repayments on time.

Will my partner’s credit rating be affected by my IVA?

If you’re married but don’t have any financial links, such as a joint bank account, then it’s wise to get a Notice of Disassociation so your credit rating doesn’t infringe on your partner’s credit rating if they want to apply for credit. This is especially useful if you appear on your partner’s credit report because you live in the same home. If you do have any financial links with anyone else then their credit rating will also be affected if you have an IVA. This includes joint mortgages, bank accounts or even loans.

[cta type=”debt”]