Completed IVA - Repair Credit Rating?

Charltons33

I've just completed 5 years of an IVA and now need to start repairing my credit score if I ever want to come within a mile of being accepted for a decent mortgage. Does anyone know of any useful tips to help me repair the damage I've done to my credit file and how long it might take me. Also, does anyone know of any mortgage companies that might want to discuss some options with me, and maybe any that would offer me an 100% mortgage. It would be a joint mortgage with my partner whose credit history is whiter than white hence us needing some decent advice before he trades me in as a liability! Look forward to hearing from you. Claire.

MortgageMamma

There MAY be one company that would accept you for 100% mortgage but I would have to check. otherwise there are plenty of 95% mortgage companies prepared to look at lending to you providing that the IVA was sati 2sfactorily conducted. As for your credit rating. you could apply to capital one for a 29.9% apr credit card and perhaps try to get a bit of car finance or something, but unfortunately, as I think you will know most companies will be looking at 40% apr plus for a while. A bank overdraft facilty may help you a little, and dependent upon your credit score some home shopping companies such as Kays Lifestyle or Next are pretty lenient with people with past credit problems. Don't over commit your self rushing trying to repair your credit rating as it doesnt work like that.

Good luck, and congrats for finishing the IVA you must feel like a massive weights been lifted.

MM

mpsavuk

Well done for sorting out your previous debts with the IVA.
But i'm amazed you now want to jump in feet first and take on yet another load of debt! And on a 100% mortgage as well?
Has that lesson really been learned?

UK007BullDog

Dont go down the route of credit repair as yet.

Can you really resist temptation of a credit card or home shopping?

Speak to a broker who will advise you where you are standing now and what you can do for the future. I would advise against getting a 25% or higher credit card.

There are lots of lenders out there with reasonable rates for people like yourself, but not on a 100% mortgage.

The alternative would be for your partner to buy on his own and your income somehow figured in. It can be done, but only a good broker will know how and can advise.

MortgageMamma

I feel that the above posts are undermining this persons request for help. Do you think that just because this individual has gone through an IVA they will have come out of it rubbing their hands together thinking what debts the can run up next? Have any idea how DIFFICULT it is for somebody who has been in this position? The psychological effects of IVA's, Bancruptcies and DMP's on the majority of people that have to enter into them are profound, and 99% of them just want some normality back in their lives once the credit restrictions are lifted. It is very difficult for people to go through this for years on end.

IMO there is nothing wrong with wanting to get back on the property ladder and rebuild their credit rating and they must do so by whatever means necessary. Just because they want to achieve things that have been unattainable in recent years does not mean they are going to go on a big spending spree and end up in a financial mess.

Another point to note is that people end up on IVA's as an altenative to bancruptcy an most people taking the IVA route know an IVA will impact on their credit rating as seriously as a bancruptcy. They are not taking the easy option by any means and often end up in large levels of debt due to lifestyle changes rather than wreckless spending.

Give the OP a bit more credibility, I'm sure he or she is more than capable of making balance decisions and managing their own finances!s

UK007BullDog

I am not trying to undermine the person, just pointing out a few issues which I see quite often. The OP needs to put some distance on their "bad" credit and live without as a sort of "proving time".

Also some of the high interest rate credit cards have a NEGATIVE effect on credit/score ratings.

All bad debt is recorded on the credit report of up to 6 years. It would be better to wait a year then try to apply for a lower rate credit card as it will then show up on the credit record if wanting to get a mortgage in 6 years time.

The underwriters are very robotic when it comes to getting a mortgage, they look at the reports and see an high charge credit card or loans. Now they think that the person in question is still not savvy enough with their finances. I know it does not sound fair nor is it fair, but thats how it goes, especially when most mortgage applications are done via a computer. A computer picks out the name of so called "adverse" credit cards and it will have an effect on the mortgage application, even though the credit is good.

I still believe a high credit card now is not as good as waiting a year and then applying for a lower card of 19% or 16%, even if the card is not being used. It is knowing on how to build a good credit record and not running out and getting the first best card. That is why I said to talk to a good broker who can guide in this field.

I am not trying to belittle anyone, so if that came across as such I do apologise.

MortgageMamma

UK007BullDog wrote:

I am not trying to undermine the person, just pointing out a few issues which I see quite often. The OP needs to put some distance on their "bad" credit and live without as a sort of "proving time".

And what are they proving during this time? A lender of any nature wants to see a history of timely payments and responsible borrowing, a blank credit record for one year proves nothing.

Also some of the high interest rate credit cards have a NEGATIVE effect on credit/score ratings.

I don't know why you think this, as they have proven to be useful for people with varying degrees of impairment to rebuild their credit rating, if used properly. As I said most lending institutions want to see a history of timely payments and responsible borrowing.

All bad debt is recorded on the credit report of up to 6 years. It would be better to wait a year then try to apply for a lower rate credit card as it will then show up on the credit record if wanting to get a mortgage in 6 years time.

This does not make sense

The underwriters are very robotic when it comes to getting a mortgage

(which underwriters are you referring to here!?)

they look at the reports and see an high charge credit card or loans. Now they think that the person in question is still not savvy enough with their finances. I know it does not sound fair nor is it fair, but thats how it goes, especially when most mortgage applications are done via a computer. A computer picks out the name of so called "adverse" credit cards and it will have an effect on the mortgage application, even though the credit is good.

I don't believe this either. Most lenders will assess each mortgage application on a case by case basis, and, if the correct product is applied for from the ofset it is unlikely to be declined. Lenders have lending criteria, and they do credit score, but if an application gets past agreement in principle stage its a human that makes a decision not a computer.

I still believe a high credit card now is not as good as waiting a year and then applying for a lower card of 19% or 16%, even if the card is not being used. It is knowing on how to build a good credit record and not running out and getting the first best card. That is why I said to talk to a good broker who can guide in this field.

I am one, and I still believe that by taking credit the OP will help themselves. There is no magic formula that moves someone with impaired credit to prime products overnight without a lengthy wait - obviously the OP wants to start his/her life again sooner rather than later

I am not trying to belittle anyone, so if that came across as such I do apologise.

Thanks for the apology, and please do not take my comments above personally, I am simply expressing my point of view.

UK007BullDog

A number of lenders will not look at an application once the "computer" has declined it, or it takes a lot of work to get it rectified or considered. The underwriters have very little scope and flexibility. In the olden days one could talk to them and bring forward a case. These days it is hard if failed at the first hurdle.
In the olden days people could see their bank managers, now 95% of people do not even know the name of their local branch managers. Everything is computerised and electronically scored and it will get even worse in the future.

I did not say not get a credit card right away. It just should be the right one. I dislike the high rates ones as if the person has to use them in an emergency it could cost much more that a lower rate one. I am quite aware that to build a good record is by having credit in the first place.

But I also believe from a personal standpoint that someone who has just managed to get debt free should stand back and take a "breather". But that is just my personal opinion and anyone is free to disagree.