An IVA badly affects your credit record for six years, or longer if your IVA doesn’t complete within six years. This article looks at what should happen, how to correct any problems, and how to improve your credit rating when your IVA is completed.
UPDATE August 2016 if you have received a letter from a firm called Bad Debtor you should ignore it! Paying them £50 is a waste of money as it won’t affect your credit score at all. See Don’t pay Bad Debtor to repair your credit record for details.
Even if you have no intention of getting into debt again, a good credit score makes it easier to rent a house, get a mobile contract and it’s essential if you want a mortgage or to be able to re-mortgage at a good rate.
How an IVA should be recorded
After your IVA is approved:
- the IVA will be shown in the Public Record section of your credit record. It can take a few weeks for the entry to appear, but when it does, the date on it will be the date of your IVA started;
- any debts which are included in your IVA but not marked as defaulted, should have a default date added which is the date your IVA started;
- there will be no change for any debts which have already been marked as defaulted or for CCJs;
- there will be no change for any debts such as your mortgage which do not form part of your IVA.
When your IVA ends and you have received a Completion Certificate, the changes to your credit file depend on whether this is less than six years after the date your IVA started or more than 6 years.
If you have completed your IVA in less than 6 years:
- the Public Record section of your credit record will be updated to say your IVA has completed. This IVA marker remains on your record until six years from the start of your IVA. This applies even if you have repaid your IVA debts in full;
- the debts included in your IVA should be marked by the creditors “to show that you no longer owe money on that account (perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way)” (quote from the Information Commissioner’s Office) and the balance on the accounts should be zero.
After six years everything vanishes and your credit rating will improve:
- the IVA marker will drop off your credit record;
- some of the IVA debts may already have disappeared and the rest should go at the same time as the IVA marker (because their default date should be on or before the date your IVA started.);
- CCJs drop off six years from the judgment date, so they should already have gone by this six year point.
If your IVA lasted more than 6 years:
- the IVA marker will disappear from your credit file;
- the debts in your IVA and any CCJs will already have dropped off your record (because their default date should be on or before the date your IVA started.)
Correcting problems
Some creditors only report to one Credit Reference Agency, so you need to check your credit records with all the Credit Reference Agencies to be sure you haven’t missed a problem. You can’t rely on your free Noddle report showing all your debts.
1) Creditor doesn’t use the correct default date
There is no point in complaining to Experian etc about this – they just report what the creditors tell them. You have to ask the creditor to correct the record. I suggest waiting at least 6 months after the start of your IVA before you bother to do this – there is no hurry and it can take a while for your IVA firm to inform all your creditors about your IVA.
Don’t try to do this on the phone because you are likely to spend a frustrating time talking to staff who don’t understand what you are saying. Instead write a letter to the Data Controller for the creditor (get the address from the ICO ), send it Recorded Delivery and keep a copy. For an unsecured debt, the letter could follow this template :
I started an Individual Voluntary Arrangement (IVA) on dd/mm/yyyy. You can confirm this by checking the Insolvency Register at https://www.insolvencydirect.bis.gov.uk/eiir/.
I am writing to ask you to correct my credit file for [details of your debt with the creditor, including account number or reference number]. This debt is included in my IVA.
At the moment [there is no default date shown / the default date is shown as dd/mm/yyyy]. This is incorrect and a breach of the Information Commissioner’s Office guidelines and the Data Protection Act 1998. There should be a default date not later than the start date of my IVA.
Please correct this entry within 28 days or supply me with a written reason why you will not do so.
If the creditor replies saying they don’t know anything about your IVA, talk to your IVA firm about whether the creditor has been informed.
If the creditor knows about your IVA but refuses to add or correct the default date, complain to the ICO. Attach copies of your letter to the creditor, proof of posting and any reply from the creditor.
One exception – mortgage shortfall debts are unusual in an IVA but if you have one, read How to repair your credit record after bankruptcy which covers these debts.
2) Creditor doesn’t mark debt as satisfied when your IVA is completed
The creditor doesn’t have to mark the debt as fully settled/satisfied so there is no point in complaining if the debt has been marked as partially settled/satisfied.
If the default date for the debt is on or before the date your IVA started, as it should be, the debt is going to disappear from your credit record six years after that date. If this is very soon, you may decide not to bother with this part of the clean up process and just wait for your file to clear itself.
But if you want to get this corrected, send the following letter to the data controller for the creditor:
I completed my IVA on dd/mm/yyyy. I attach a copy of my Completion Certificate.
I am writing to ask you to correct my credit file for the above debt which was included in my IVA. The Information Commissioner’s Office guidelines state that my credit file should show that I no longer owe money on that account, perhaps by marking the entry as ‘partially satisfied’ or ‘partially settled’ or in some other way.
Please correct this entry within 28 days or supply me with a written reason why you will not do so.
Again, complain to the ICO as above if the entry is not corrected.
3) CCJs are not amended
The court only has to mark a CCJ as satisfied if you have paid it in full, which you haven’t – there is no ‘partially settled’ status for a CCJ.
Is it worth doing this?
It is definitely worth correcting the dates of default unless they are just a bit late. If these are months or even years late, then this will delay the time until your credit file is clean as these debts will remain for six years after the default date. If you want to remortgage once your IVA has finished, it is essential that your credit record improves as fast as possible.
Marking your debts as satisfied after you get your Completion Certificate is less important. Even if you get this amended, most applications for credit are likely to be refused whilst the IVA remains on your credit file. If you are close to the six-year drop-off, then you could decide to wait and let that clean everything up. However, getting a debt marked as satisfied will improve your credit rating slightly, which may be enough for you to be approved for a ‘bad credit’ card, see below. It also prevents the debt being ‘sold on’ to another Debt Collector, which is annoying as you have to correspond with yet another person and send them details of your IVA.
Getting positive markers on your credit file
You should aim to start acquiring new, positive credit marks after your IVA has finished. First deal with the “clean up” process outlined above for your old debts. And make sure that you are on the electoral roll, your address and any other details are all correct with the credit reference agencies. This may take several months to complete if you have to go to the ICO.
Then apply for a Vanquis or a Luma credit card. Vanquis is owned by Provident, Luma is owned by Capital One – if you have a debt to one of these firms in your IVA apply to the other one to maximise your chance of being accepted. If you are refused, double-check your credit file really is clean with all three credit reference agencies, wait a few months then apply to the other card.
These cards charge a very high rate of interest. This doesn’t matter because you should aim to use the card every month and repay it in full every month, so you will never pay any interest! If you find your balance is creeping up because you are not clearing it in full, you need to stop spending on the card until it is cleared and have a re-think about budgeting. Your credit rating will not improve faster if you leave a balance on this card.
After you have had one of these cards for a few months, think about getting a cheap monthly mobile phone contract, probably a SIM only one, to get more positive marks on your credit file.
This takes time
If you were expecting the end of your IVA to make an immediate improvement to your credit score, it usually doesn’t, unless it is after the six year point. There isn’t a way to speed this up – firms offering a ‘repair your credit’ service either don’t work at all, or they will be no better than what you can do yourself using the letters here.
Look out for the problems with “bad credit” cards
The cost of uniforms and other school kit
88 ideas that can save you money!
Belinda says
Hi, my husband entered into an IVA on the 29th June 2009. We were in a fortunate position to completely clear it by 2012. We have already taken the steps such as getting a vanquis credit card and we have always had mobile phone contracts and never missed a payment on our mortgage. How long will it take before our credit file is completely clear and showing a positive mark.
Sara (Debt Camel) says
Hi Belinda, if all your debts have a default date on or before your IVA start date, i sounds as though it should be a few weeks! The IVA marker should be gone after 6 years.
Belinda says
As in previous post our IVA of 2009 was discharged in 2012. However we went to speak to our bank regarding a small loan for home improvements and discovered that Equifax had a Notice of Correction stating we had been in an IVA which was now discharged. This was enough for our loan to be turned down! Surely this is wrong when it is over six years since the IVA?
Cath says
Our iva was finished three years ago but is still on record how do we get it removed we have the certificate to say it is finished?
Sara (Debt Camel) says
Hi Cath, this is unusual. You need to talk to you IVA firm about them informing the Insolvency Service so your name comes off the IS Register. This will then correct your credit file.
tammy says
Hi, I entered into an IVA in Sept 2013. I receieved a lump sum the following January and paid off the Iva . It wasnt all of the monies owing, but my supervisor put this amount forward to creditors who agreed they would accept this as full and final settlement. However, this happened in the January and I have receieved no letters or paperwork to say this has been completed. What should I do? I understand that this IVA will still show for a further six years, so until 2019, but my credit report still lists these as active? Please Help? I had no idea about this letter of completion that people have been discussing, so should I have had received this?
Sara (Debt Camel) says
Hi Tammy, yes you should get a completion certificate – and you should have had it a long while ago! I suggest you check the Insolvency Register https://www.insolvencydirect.bis.gov.uk/eiir/. If your name is still there, your IVA firm hasn’t yet properly closed your IVA down – this has to be done before your credit records will be updated. If your name isn’t there, then your IVA has been closed – call your IVA firm and ask for your completion certificate.
tammy says
thankyou, I wasn’t even aware you could check the register like this for free! I have checked and my name is still listed, which I don’t understand as they said me paying this off would finalise evrything. I have heard absolutely nothing from them since this time either, I will contact them
Linzi says
Hi can you help me please? We entered into an IVA over 6 years ago, we received the certificate of satisfaction.
Also manages Vanquis and Aqua credit cards, we have spent time clearing our credit file report up with Experian, Equifax etc our score has gone up and there are no unsatisfied things on there at all. We want to start looking for a mortgage, is this possible? Do we approach a broker??
Sara (Debt Camel) says
Hi Linzi, well done on getting through your IVA! If it has now dropped off your credit file and all the debts in it have disappeared as well (which they should have done if their default dates were correct) then you should be OK to start looking for a mortgage. Assuming of course that you have a deposit saved up! Yes I do suggest going through a broker. Some high street banks won’t consider anyone who has been bankrupt or in an IVA, so you could waste a lot of time make applications that are refused. A broker should be able to suggest who to apply to.
Nick says
Hi,
I arranged an IVA in October 2008 for my private debts. However my business collapsed in 2009 and we had to file for Bankruptcy in August 2009. This was discharged in 2010. The Official Receiver said that the debts within the IVA would be combined with all of my business debts so we listed everything in the Bankruptcy Statement of affairs. However, the IVA is still showing as active on our credit score and we are also now be chased for one of the debts contained listed within the Bankruptcy for a secure personal loan on £23,000 which we tried to use as a consolidation loan before our original IVA.
Is this legal and are we still liable after Bankruptcy, for this debt? I entered into a three year voluntary repayment arrangement which was conducted by our Trustee. I completed this. We are at our wits end and this is now making us severely depressed and stressed out as we thought that this nightmare was over. However it seems to be starting all over again!
Any help or advice would be very much appreciated.
Sara (Debt Camel) says
Hi Nick, this sounds like 2 separate problems.
Can you check the Insolvency Register at https://www.insolvencydirect.bis.gov.uk/eiir/ and see if your IVA is still showing as open. It sound as though it is – in this case you need to talk to your IVA firm, give them your bankruptcy details and ask them to close it. If it isn’t, you need to talk to the credit reference agency and ask why your IVA is still showing.
Re the secured loan, put in a formal written complaint to the firm (email will do with COMPLAINT in the title) saying this loan was included in your bankruptcy, giving your bankruptcy details.
Nick says
Thank you very much for your help and such a prompt response. Very impressive.
Will take your advice.
Best regards
Matt says
My 6 year mark is the 09/11/2016, will the notice of an iva ccj and defaults all around this date automatically drop off or will I have to ask for this to be updated with creditors
Sara (Debt Camel) says
They will all drop off automatically :)
Bill says
Hi Sara, can I ask a question please? I had an IVA (full/final/one-off) in December 2010. The accounts went into default this month and they then weren’t partially settled by the insolvency company until December 2011 (even though i paid them in December 2010). So on my credit file, I have default date: December 2010, Satisfied date: December 2011. Under ‘Court Information’ on Equifax, I have: Court date: 29/12/2010 Date Satisfied: 29/12/2011. Would the 6 year timer start from the earlier or later date?
Many thanks for your advice! Bill.
Sara (Debt Camel) says
The IVA insolvency marker will disappear 6 years after the start date of the IVA. Any debts with a default date will disappear 6 years after the default date. So it sounds as though your file will be clear in Dec this year :)
Jason Jones says
My IVA was dated Feb 2011 but I have an account that was passed on that shows Aug 2011. It’s only showing on Experian though. My IVA was settled early in July 15. Should all my defaults dissappear after Feb 2017? If I ask them to change that date of the August one then that should go as well ?
Sara (Debt Camel) says
Yes & yes!
Lee says
I have just been informed by the insolvency service that it’s gotta stop on for a further 3 month showing completed surely this is derogatory to me I’ve completed and want to rebuild my life. All creditors have been supplied copies of final report along with all credit agencies.
This can’t be right and is there a way to get it off sooner.
Sara (Debt Camel) says
If you are talking about the Insolvency Register then yes, a completed IVA stays for 3 months, those are the rules.
Rachel says
I’m coming to the end of a seven year Debt Payment Plan through the Debt Arrangement Scheme in Scotland, in fact I made my final payment yesterday!
I recently did a credit check to make sure all the debts were gone (as the start of the DPP was over six years ago), but noticed I had a few accounts with incorrect default dates (some were only showing as defaulting in the last year!), so I raised a dispute with the credit reference agency (Call Credit) for each of these accounts, saying what the correct default date should be. The credit reference agency has now written to me saying they contacted the creditors on my behalf, but had no response, so the accounts have been suppressed from my file. So, because of the suppression, all looks well on my Call Credit File., and there is no sign of those accounts at all.
Unfortunately though, on my Equifax file it says: “Negative – You have had at least one Voluntary Arrangement. You have had at least one account in Default or Repossession”, and there are the three accounts (the same as the disputed ones with Call Credit), showing in closed accounts, but with balances still outstanding and regular payments being made.
Does the Voluntary Arrangement refer to my DPP/DAS? If so, does the same rule apply as for IVAs and should this not show after six years? Or does this refer to a specific account? The three accounts it’s referring to as in default only show in closed accounts, but how can I get them to stop showing at all, as they are the ones that are well over six years old, and have already been disputed on my behalf with no success (and are clearly still showing as in default, as they are being noted as negatives).
Is my next step to write to the creditors themselves and ask them to correct the default date, so that these accounts don’t show on my file? If so, can I just adapt the letter template for the IVA above?
After paying this DPP without fault for seven years, I was really hoping this would be the end of it all. I am desperate to be able to re-mortgage as my ex-partner, who have haven’t seen or spoken to in eight years is still named on my mortgage, and I’ve been told I can’t get his name off (and therefore the financial connection between us) without applying for a new mortgage :(
Sara (Debt Camel) says
I know little about debt arrangements in Scotland. However as far as I know, a DAS is better compared to a DMP than to an IVA. It sounds to me as though the default dates on these debts are just wrong, so you should ask the creditors (not the credit reference agencies) to put them right. See https://debtcamel.co.uk/debt-default-date/ for how to do this. If you need any more help, can I suggest you talk to the debt adviser who helped to set up your DAS?
Rachel says
Thanks, I’ll write to the creditors and see how I get on. I did mention it to my debt advisor, who just said it wasn’t right and to file a Notice of Correction with the credit reference agency, which is why I tried that first!
Iain says
I completed my 5 year old IVA this summer and got my confirmation letter just before the end of 2016
This week, I went to my bank and asked them whether I was now able to consider if I should change my account from he basic one that was permitted when I had the IVA.
The customer service asked an advisor, then came back and said the 6 years of being restricted started from the end of the IVA – meaning when it was settled.
i really didn’t expect this, and don’t believe it, but what is the right advice, and what can someone who gets this back at them do?
Sara (Debt Camel) says
It is up to each bank to decide whether to give you a full current account. Most banks will refuse you whilst the IVA marker appears on your file. I suggest you concentrate on cleaning up your credit record as the article above explains. Then when the IVA marker disappears from your credit record, you could consider applying to a different bank.
Alternatively, pick one of the new basic bank accounts and switch now to that! They are very good, see https://debtcamel.co.uk/new-basic-bank-account/
ian says
we completed our IVA 18 months ago early and our 6 year period is up in July this year but we are desperate to move but been advised we can’t until this drops of our file as we will struggle to get a mortgage. is there anyway we can get this off now and out of interest how much will our credit score improve once it drops off ? to be clear we have gone down the Vanquis route and all good and had phone contracts for years with no missed payments we have no other debt
Sara (Debt Camel) says
No there is no way to get it off your account early. Your score should improve considerably once it goes – if all the debts in your IVA are marked with defaults on or before your IVA date, they should all be gone too at that point and your score will probably be up to good.
mike says
Hi Sara,
What happens if you are able to pay off your IVA early because you inherited some money say year 3?
Would you have to pay the IVA amount (monthly payments x how many months payments left) or would the money go to the total amount owed (as in before the IVA)?
Sara (Debt Camel) says
A windfall such as an inheritance or a PPI refund gets paid into your IVA. It does does NOT reduce the amount you still have to pay.
Your IVA will end early if the windfall means you repay the full amount of your debts PLUS the IVA fees (several thousand pounds) PLUS in some cases (it depends on the details of your t&cs) statutory interest at 8% on your debts.
Tracy says
Hi we made final payment of a 6 year Iva in Sept 2016. We still have not got certificate of completion ( now end Feb 17). After reading your forum I checked the insolvency register and our names are still listed. Can you advise what to do next please
Sara (Debt Camel) says
This article https://debtcamel.co.uk/end-of-iva/ looks at what should happen at the end of an IVA https://debtcamel.co.uk/end-of-iva/. Have you asked your IVA firm what is happening?
Becca says
I entered an a 5 year IVA on 12/06/2012 and the final payment is due this June, How soon after can I get to work trying to repair my credit, and when will it be removed from my credit file and off the IVA list.
I hate the idea of getting further credit to repair it, someone suggested pre-paid cards do the really work or not. We are hoping that in 4-5 years we will be in the position to enter the right to buy scheme and get a mortgage with my partner to purchase our home. So its important that we do repair it.
What kind of credit score should I be looking at aiming for.
Sara (Debt Camel) says
You can do the first stage in the above article (Creditor doesn’t use the correct default date) now – with any luck they will all be fine and you won’t need to get anything corrected.
You can do the second stage after you get your completion certificate – but it’s best to wait a couple of months to allow most creditors to correct everything themselves.
Your IVA will be deleted from your credit records on 12/06/2018. It will be gone from the Insolvency Register 3 months after you get your completion certificate.
If you want to get a mortgage, you really do need to be using some real credit. The best thing is to get a bad credit card such as Vanquis, use it to buy something small and regular each month (a tank of petrol?) and they repay the card in full automatically by direct debit. This way you aren’t really borrowing at all and you aren’t paying their horrible rate of interest.