Completed IVA early but credit rating has got worse

AnnaVic

I completed my IVA almost 3 months ago (just over a year early) receiving the completion certificate at the end of June. I know it can take a while for it to update on your credit file and until this morning there had been no change to my score of 507 "Very Poor". This morning I logged onto Experian and my score has got worse, dropping to 407. What's going on? How is that possible? What do I do about it?

[Deleted User]

It's because the scores are fictional and entirely meaningless. Simply ignore them.

Your history will start to look more positive, which is all lenders see or care about.

StopIt

Welcome to the CRA random Number Generator.


I hope you're not paying £15 a month for this!


First, if you are, ditch it, sign up for the MSE Credit Club. It's free and covers Experian


Now, once you've done that, sign up to Noddle, and ClearScore, both free and will cover all 3 major ratings agencies.


Done? Now, ignore the scores completely. Make sure that all of the creditors covered by the IVA show your debts as settled, and there aren't any other nasties, late defaults filed etc to sort out.


From there, get a credit building credit card. Pay it off in full every month. Rinse and repeat. Once the debts the IVA contained drop off your file, your file will look better.


Your score means zip, but you need to start building a history of being responsible with credit.

sourcrates

Also you may still show on the insolvency register, as well as that, the IVA may still show on the public information section of your file as well.

You have to remember that the score you see, is generated by the CRA, its a snapshot of how they view you, they dont offer you credit facilities so this information should be taken with a pinch of salt.

Benalibob

Although your IVA has now been completed your credit score is unlikely to improve even fractionally until 6 years have passed from the date you commenced the IVA. Even though the IVA lasts for 5 years or 4 in your case it will still remain on your credit file for the full 6 years, essentially meaning that most forms of credit will still be out of your grasp for a further 2 years. Your credit score has a maximum with each different reference agency, someone with a perfect payment history has a much higher score, things such as defaults, missed payments, bankruptcy, IVA's will all reduce the score by a certain amount, being on an IVA will obviously reduce your score considerably, much more so than say a missed payment so even though you no longer owe the money that doesn't stop the score from being reduced by the IVA, it just makes you less of a credit risk.
Your score may have dropped lower due to many reasons such as applying for credit also when making settlements this can sometimes mark the debt as partially settled which does put a marker on your credit file, i am not sure if there is an equivalent in IVAs when the debt is paid off early.

AnnaVic

Thank you for this advice. I'm not paying the £15 a month but I was about to sign up to do so so I could see the detail. I didn't know about the free services so I will get on to those now. Thanks again.

laurence9696

I was going to get an IVA but decided against it before the meeting with the creditors took place- as it had to many negatives.
Barclaycard have contacted me to say they are going to close my account and I need to pay the full balance- due to them receiving information regarding an IVA. Barclaycard have said I cannot have an account with them for 6 years- even though the IVA has never been 'live' or 'agreed'. Will a marker be put on my file now, just because I considered an IVA?

mwarby

I too had a short IVA (took 6 months), planned that way from outset.

Your score will fluctuate but most mainstream credit is out of reach until the 6 year point (mortgage being an exception as more about meeting specific criteria and affordability and deposit)

It may take a few months for creditors to settle your accounts and set the correct default dates, it's worth checking in a few months it's been done

[Deleted User]

Ignore the above advise advising of any credit score changes and how they fluctuate etc etc.

Lenders don’t see or care about credit scores generated by the CRA’s.

As for what to do about it - do nothing apart from continue to ignore it and only look at the data on your accounts.