Life after an IVA
What happens next?
Though it may seem far away, there will come a time when you make your final IVA payment, freeing you completely from debt. One of the major benefits you may notice is that you become comfortable living within your means and do not require any further credit assistance.
After completing IVA payments you will receive confirmation that all payments have been met
An IVA will show on your credit file for a total of six years (normally one year after completion of the payments), but that is not to say you can't obtain credit. After completing IVA payments you will receive confirmation that all payments have been met by way of a completion certificate, which should also be reflected in your credit file. It is also advisable to contact credit reference agencies to make them aware that you are now eligible to apply for credit.
Provided you have met payments on time during the duration of the IVA, you should be able to upgrade your bank account to a current account following completion of your Individual Voluntary Arrangement.
Your Credit Rating
Essentially, having a new current account means a clean slate for your credit score. If however you're still struggling to obtain credit it would be advisable to speak to a broker who will be able to recommend other products that require a lower credit rating. Or alternatively you may wish to obtain a pre-paid credit card, which will provide the same benefits for a small fee.
Every payment made in full and on time will help to boost your credit score
You can repair your credit rating by taking positive steps such as making payments on time. A good way to improve your credit file whilst in an IVA is to obtain a mobile phone on contract and maintain payments. Every payment made in full and on time will show as a positive entry helping to boost your overall credit score.
A credit file also displays records of the number of searches carried out against your credit file. It is advisable not to make multiple applications for credit at once as creditors may view a high number of searches as a cause for concern.
It is also beneficial to ensure you are correctly registered on the electoral roll. This indicates you have a permanent place of residence and ensures searches against you can be completed accurately and in full.
Obtaining a Mortgage
Having completed an IVA will not prevent you from obtaining a mortgage
Having completed an IVA will not prevent you from obtaining a mortgage; some high street lenders may not agree to a mortgage until six years after completion of an IVA but a sufficient amount of specialist lenders offer mortgages enabling individuals to seek a competitive rate.