IVA completed. How to I rebuild my credit file?

itstricky

Hi all,

So after 5 years my IVA has been completed and I have been issued with a certificate. It has also updated on my credit file. Where do I go from here? Will it be another year before the old debts and the IVA come off my credit? Can I ever get back to normal? Thanks in advance.

gd55

Well done on completing your IVA! Yes you can get back to normal, and you can start now. My IVA completed in January and already things are looking brighter.

The IVA and defaults fall off six years from their start dates, so it's important to check those dates on your full credit reports. There's a sticky post with a DebtCamel link with info on how to request these to be updated if they're not aligned. (I'm still battling this with a couple of creditors!)

When, or if, you're ready, you can consider taking on credit products again. A monthly phone/SIM deal will help showgood mamagement on your file, and you'll probably find the likes of Vanquis and Capital One will offer you a credit card. Using and paying in full each month will add positive marks to your file. 

Stick to the good budgeting habits you'll have gained through the IVA. Your IVA payments can now go into an emergency or other savings fund.

Do you have any short, medium and long term financial goals? I have found setting out what I want from my money over the next two, five, ten and fifty years is really motivating.

itstricky

Thanks for the reply. I have acquired a few credit cards (it seems some credit file companies offer a lot more for my circumstances compared to others) and have used them then paid them off each month in full. It has helped my credit score a lot. Going forward after the 6th year am I likely to be able to obtain a normal mortgage? I have a good job etc and I assume with that history being off my record I should be good to go?

gd55

Ignore the numerical score, its a marketing gimmick the different credit reference agencies make up. The important thing is you have a file that shows sensible use of credit over a long period of time.

Worth posting on the mortgage board to get some specific thoughts there. From what I've been told there'll be options, especially with a good deposit.

MrFrugalFever

Congratulations. You will now start seeing an improvement across your credit reports as time goes on.

The pain of the IVA feels almost impossible to live with initially but I bet now you feel confident and disciplined not to go mad with any form of credit.

Take out a couple of credit cards and use for everyday purchases then pay back in full before the due date, make it your mission to NEVER pay any interest. Do not get hung up about how many times you’ve been close to your limit (obviously stay under it) or how many times you’ve done soft searches or any other nonsense the credit report brokers tell you for now, just remember the golden rule of DO NOT MISS A PAYMENT and pay your statements IN FULL to avoid interest and charges.

A good period of this will stand you in good stead to achieve your goal.

Aim to save as much as you can and chase the APR% rates for savings.

I discharged myself from my IVA at the end of year 4, I’ve now passed year 5 (still got IVA showing on reports until end of year 6) and I now have the following;

- 1 x Personal unsecured loan - used to settle IVA in full - 3 payments left until paid in full (overpayments made)
- 1 x credit card with Vanquis (£250 limit) - first CC I got just before official discharge
- 1 x credit card with Capital One (£1,500 limit) - second CC 3 months after discharge
- 1 x credit card with Zopa (£5000 limit) - third CC 10 months after discharge
- 1 x credit card with Barclaycard Avios Rewards Card (£6500 limit) - 12 months after discharge

I am also eligible for a £10k+ personal loan with NatWest (my main bank) but I DO NOT wish to take out credit that I do not need.

Obviously affordability will play a part in this.

Good luck on your journey of recovery!