{"id":1741,"date":"2013-12-18T12:42:00","date_gmt":"2013-12-18T12:42:00","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=1741"},"modified":"2019-02-04T12:47:00","modified_gmt":"2019-02-04T12:47:00","slug":"will-an-iva-affect-my-credit-rating","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/will-an-iva-affect-my-credit-rating\/","title":{"rendered":"Will an IVA affect my Credit Rating?"},"content":{"rendered":"\n

When you enter into an IVA<\/strong> all unsecured accounts automatically go into default, given that you have ceased to comply with the terms and conditions of the relevant credit agreements.<\/p>\n\n\n\n\n\n\n\n

Some of your accounts may already have been in default prior to that time. All defaults are recorded on your credit files which are maintained by credit reference agencies such as Experian and Equifax. Access to and publication of such personal financial data relating to insolvent individuals is not prohibited by the Data Protection Act. The business of the credit reference agencies is to retrieve such data, record it on your credit file and sell it to interested parties provided they have a consumer credit license. Thus banks, mortgage providers, HP providers, credit card providers and even trading creditors may be able to access your credit file. For a small fee you or any private individual can obtain their own credit file. In certain instances, a private individual can obtain the credit file of another individual such as when the two individuals are co-habiting or even sharing the same house.<\/p>\n\n\n\n

The record of such defaults remains on your credit file for six years from the time that the default occurred. If you do an IVA<\/a>, default data will not be removed from your credit file for six years, even if you successfully complete your IVA and obtain a Certification of Completion (of your IVA) from your supervisor.<\/p>\n\n\n\n

\"Credit<\/figure><\/div>\n\n\n\n

A standard condition of your IVA is that you do not acquire any \ncredit or enter into any credit agreement without the express permission\n of your supervisor, who in turn may have to obtain the express \npermission of your creditors. There are usually some practical \nexceptions to this, which are anticipated and detailed in your IVA \nproposal. For example, you will usually be allowed to incur credit in \nregard to some utilities such as water charges, electricity and gas but a\n monetary ceiling is normally imposed on such items of expenditure e.g. \nno more than \u00a3500 credit may be incurred in respect of such items. Your \ncredit file will carry the records of such credit activities. It is \nimportant to maintain payments in respect of all forms of credit allowed\n by your IVA and when you complete your IVA, you would expect your good \ntrack record on such credit to be viewed positively by creditors.<\/p>\n\n\n\n

In regard to your secured debts, your IVA allows you to continue \nservicing these. However, if you needed to change your car for example \nand enter into a new HP agreement you would have to obtain the express \npermission of your supervisor and creditors. You may have anticipated \nthis need and allowed for it in your IVA proposal but nevertheless you \nwill need to clear it with your supervisor before you progress the \nmatter. If you wanted to re-mortgage your property to release equity, or\n to extend the term of the mortgage (thereby reducing monthly mortgage \npayments) or to switch your mortgage from being on a re-payment basis to\n being on an interest only basis, you would again have to obtain the \nexpress permission of your supervisor and of your creditors.<\/p>\n\n\n\n

In considering any request for credit facilities, whether during the \nlife of your IVA or following its successful completion, creditors will \nnaturally check on your credit history via your credit file. You may be \nrefused credit by some lenders if your credit file still carries records\n of your defaults. If you are granted credit, you may have to pay \npremium interest rates. If you were to seek to take out a mortgage for \nexample, lenders would be likely to seek a higher deposit than if you \nhad a clean credit history and you could be quoted interest rates as \nmuch as 6% to 8% greater than high street rates.<\/p>\n\n\n\n

On the other hand, creditors will take into account that you dealt \nwith your former financial difficulties by entering into an IVA, by \nmaintaining it and by successfully completing it. They will also \nconsider how you managed any credit allowable while you were in your IVA\n (e.g. credit used to pay for utilities). You will certainly find it \neasier to access credit after completing your IVA than you would if you \nhad just been discharged from bankruptcy. These are positives and may \nwell have a crucial bearing on whether you can obtain post IVA credit \nand what interest rates you may be charged.<\/p>\n\n\n\n

Entering an IVA certainly affects your credit rating. However, six \nyears from the dates of your defaults, the credit reference agencies \nshould automatically update your credit file and remove all references \nto your defaults. If you find that this has not been done, you can \nrequest the credit reference agencies to do so. If you do not get a \nsatisfactory response from them, you can invoke their complaints \nprocedures to deal with the matter and so begin to repair your damaged \ncredit rating.<\/p>\n","protected":false},"excerpt":{"rendered":"

When you enter into an IVA all unsecured accounts automatically go into default, given that you have ceased to comply with the terms and conditions of the relevant credit agreements.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-1741","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1741","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=1741"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1741\/revisions"}],"predecessor-version":[{"id":1751,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/1741\/revisions\/1751"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=1741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=1741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=1741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}