PLEASE HELP! Cannot obtain credit after an IVA to rebuild credit rating

vjh87

Hi, I am a 26 year old woman and I completed an IVA in April this year early by full and final settlement, 3 years before the end date. My credit rating/score is obviously very poor due to this, but I was told that by settling early with a full and final lump sum would work in my favour. I am getting married next year and my partner and I are desperately trying to save for a house. I have been told to rebuild my credit in order to obtain a mortgage, and have taken all the necessary steps I was advised to, I have sent copies of my IVA completion certificate to all three main credit agencies, equifax, experian and callcredit, I have added myself and my Fiance to the electoral roll where we live, and I have applied for a credit card specifically designed for people with CCJ's who need to rebuild their credit, but have been declined. I am at a total loss of what to do, I cannot rebuild my credit if I cannot obtain any and show I can use it responsibly. I got into debt at the age of 18, 8 years ago, and have worked so hard to clear my debts with debt management plans and then the IVA. I am officially debt free. I just don't know what to do, I need to prove that I am not a risk and can use credit responsibly, for the purposes of getting a mortgage in the next 2 years, we have savings and are building towards a deposit, but that seems as though our money will be useless if no lender will touch us. Please please help, I am going to reinstate my membership with Experian at the end of the month, will they be able to help me repair my credit rating/score? I also sometimes receive letters for a former tenant of the flat I am living in, which seem to be from the envelopes, threatening debt related letters. Could this be having an affect on my credit, as a mark against the address even though this person is not connected to me whatsoever? My Fiance doesn't have the best credit rating either although he has no debt, it may be a case of lack of credit history, or non sufficient earnings in his case, but he has been declined for credit also, as we were both advised to get a credit card and start using it responsibly. Sorry that this is so long winded but I really need some actual advice from someone who knows what they're talking about! We are running out of time to build our credit and get a mortgage, I am soon 27 and my Fiance is 31, if we want to get a 35 year mortgage, we need to act as quickly as possible so we are trying to do anything we need to do as fast as we can. We are living on a very tight budget in order to save £800.00 every month, but these savings do not seem to have any standing in our case, as I did appeal the decision of the credit card and explain my individual circumstance, but was still informed that they could not offer me a credit card at this time, and to seek financial advice. Please please help, I'd be so grateful for any sort of plan of action, we are working really hard and just want to stop renting by the time we start a family. Thank you for your time!!!

BugsyBrowne

Whether you've settled your CCJ or not it will keep on your credit files for 6 years from the date it was put on your files.

When you apply for credit every lender will see this CCJ and although it's settled it's still a CCJ on your credit file.

Try cap1 classic or Vanquis.

Also ignore the scores Experian sell as they're nothing but meaningless numbers.

simeyb

Unfortunately, an IVA is perhaps the worst place to have gotten to except bankruptcy, but whether you were in a DMP or IVA, its the defaults which are the killer and are going to be a marker on your credit file for 6 years from the date of default as mentioned above.
Also, your credit accounts will be marked as satisfied as opposed to settled if you didn't pay the creditors in full - this is less appealing to any new lender who, despite freezing interest, as would have been the case in an IVA, didn't get back all of the money that they lent to you.
The responsibility of a lender to determine whether you are credit worthy or not only extends to their own lending criteria and the information from the CRA's (and yes the number is meaningless - I have two defaults, yet my Experian score is 962!).
The overall impression a lender will have for some time is that you are a risk I'm afraid - harsh reality, sorry.

Thrugelmir

vjh87 wrote: »

but I was told that by settling early with a full and final lump sum would work in my favour.

The reality is that you cannot expect financial organisations to lend you further money having recently written money off. The intial stages of rebuilding your credit rating will involve showing that you can manage your financial affairs responsibly. One way is to learn to save before you spend, this will also provide you with reserves for emergencies.

rolls99

As others have mentioned, don't spend any money (other than a £2 statutory report) on credit reference agencies.

Your IVA will remain on your file until 6 years have elapsed as will any defaults, there is nothing you can do about that.

What you really need to do is concentrate on your saving: if you are putting £800 a month away this will soon mount up and the more you have saved when you do look to a mortgage the better.

You could try the likes of Vanquis and Capital one for a card, but, if you have made several applications recently then the best thing you could do is forget about it, and wait until the new year before trying again.

If you're heart is set on something, and it's as significant as buying a home and settling down, this is fantastic - just don't lose sight of the fact that (especially if you're saving, and eventually manage to get a card or two and use them responsibly) although it is a bit of a pain to wait, in the scheme of things it isn't that bad - you will get there.

Letters for someone else should not have any impact on your credit worthiness, it is the person not the house (unless you have some joint financial association to the person)

BrookesAndrew

Try Vanquis that is who I am with. I am 18 years old and my credit rating isn't that good because I have never had any credit so I am in the situation your partner is in.

I wouldn't worry you can improve your credit rating. The best thing to do is to get your partners credit rating up because he hasn't had an IVA so it might be worth getting the house in his name. I know it might not be what you want to do but its probably your best bet in getting a house.

Please cancel the experian membership straight away as it does not mean anything. Just get a £2 report from equifax and make sure everything has been reported on your credit file. Get one every 6 months or every year.

vjh87

Thank you all, I suppose there is no quick fix, and although I have dealt with my debts in the best and only way I could, I am still paying for the mistakes I made as a very young adult with a partner at the time. You live and learn! We will keep saving and keep trying, hopefully we will get there in the end.

fermi

When did the IVA start? And have you made sure that all accounts covered by it have the default date recorded as on or before the IVA start date?

This soon that is not going to repair the damage, but making sure those dates are correct will help everything drop off when they should and at the earliest point possible in a few years time.

What card did you apply for? As said, there are some that BRs discharged for a year or 2 have managed to get, so may be worth a 2nd look at those suggested as long as you do not apply to much over too short a period.

vjh87

The IVA started in May 2011 and I completed it in April 2013. Before the IVA I was in a regular debt management plan, but once I started earning a bit more I was told I was eligable for an IVA, so I had the IVA for almost 2 years before settling, I had some money from my Nan and paid £5000 as full and final settlement.
The card I applied for was Luma (Capital One) who claim to specialise in helping people like me with CCJ's and bad credit to rebuild their rating. I met all the specifications, being over 18, full time employed, uk resident and on the electoral roll, I really did think I would be accepted, the interest rate was enormous of course, but that wouldn't have been a problem as I'd planned to make one or two purchases on the card per month and pay it off straight away, to prove I am a responsible borrower.
The IVA should be removed from my file in 2017 then is that correct? Would you say it will be impossible to get a mortgage before this date? As I will be almost 30 by then and my Fiance 35. Thank you

BugsyBrowne

It will defiantly cost ya with that CCJ hanging over your files when it comes to a mortgage.

BrookesAndrew

BugsyBrowne wrote: »

It will defiantly cost ya with that CCJ hanging over your files when it comes to a mortgage.

Its an IVA not a CCJ. Not very motivating words there either, don't see how that is going to help.

I can understand your hurry to get a house but there is no rush. Just keep saving and apply for Vanquis. Also have a look at the gudie which is Credit Cards for bad credit history. They will be very good. You can also check how likely you are to get a credit card without a search on your credit file.

I would definitley focus on getting your partners credit rating up as well because that will help as well in the grand scheme of things.

Hope this has helped.