About Finance

If you’re struggling with your debts and thinking about IVAs (Individual Voluntary Arrangements) and other debt solutions that may be able to help you, one of the things you may be wondering about is the effect an IVA will have on your credit report.

Different things will affect your credit report in different ways, and can stay there for different amounts of time. So – how long will your IVA stay on your credit report?

The Information Commissioner’s Office (ICO) publishes a leaflet called ‘Credit explained’, which contains plenty of information about things like this.

An IVA will stay on your credit report for six years from the date it begins (not from the date it finishes). Most IVAs last five years, which means it would stay on your report for one year after the IVA has finished. Should your IVA last longer than six years, it’ll remain on your report for the length of the IVA.

And once the IVA has been completed, you may still need to send proof of this to the credit reference agencies: Callcredit, Experian and Equifax.

In fact, most things will, like an IVA, stay on your credit report for six years: defaults, Administration Orders, County Court Judgments (CCJs), High Court Judgments, etc.

But some things will stay there for a shorter or longer period than an IVA. Electoral roll information will stay there indefinitely. An Experian or Equifax search will stay there for one year, while a debt collection search will stay there for two years.

And although a bankruptcy will stay on your credit report for six years from the date of your bankruptcy (even if you’ve been discharged), a bankruptcy restriction order can stay there longer.

What does it mean if my IVA is on my credit report?

As the ICO explains, no-one actually has a right to get credit. Before someone will lend to you, they’ll want to feel confident about you repaying the money, which is why they may look at the information which is held about you by the credit reference agencies.

If you’re on an IVA, you won’t be able to take on any further credit without permission from your IP (Insolvency Practitioner) – and even if they give their permission, there’s no guarantee you’ll be able to borrow money. After all, if you’ve entered into an insolvency procedure (IVA, bankruptcy, DRO (Debt Relief Order) or Trust Deed), this shows potential lenders that you’ve not managed to repay the money you’ve already borrowed as agreed.

Of course, the way you’ve handled your financial affairs in the past isn’t the only factor. Your salary can also play a part – even if you’ve always repaid everything you owe on time, a lender may decide not to lend to you if they don’t think your income is high enough to cope with the repayments.

If you’re thinking about entering an IVA, the impact on your credit rating is certainly something to consider – but it’s not the only thing! Entering an IVA is a big decision which requires a lot of thought and you’ll need to discuss it with an IVA expert before you make any firm decision about the best way of tackling your debt problems.