An IVA wrecks your credit record for at least six years. It can be longer than six years if your IVA doesn’t complete within the 6 years, perhaps because you have had payment breaks.
After your IVA finishes, in theory you don’t need to do anything and all the problems will disappear from your record after the six year point…
But it is important to check your IVA firm has closed down your IVA correctly, see What happens at the end of an IVA? And after that, you also have to check your creditors have updated your credit records properly.
Many people have to send some letters asking their old creditors to get things right. This article has template letters to send and advice on how to improve your credit rating after an IVA.
This isn’t hard, you just need to be organised.
Contents
How IVAs should show on your credit record during the IVA
If you look at your credit records (see How to check your credit records – there is no need to pay for this!) a few months after your IVA has started you should see:
- the IVA shows in the Public Record section of your credit record. It can take a few weeks for the entry to appear;
- all debts in your IVA should be marked as defaulted;
- the default date for every debt included in your IVA should be the date your IVA started or earlier;
- there will be no change for any CCJs even though they are in your IVA;
- there will be no change for any debts, such as your mortgage, which do not form part of your IVA.
Your credit record after the IVA completes
When your IVA ends you are sent a Completion Certificate. Until that point your IVA is still open, even if you have made the last payment.
The changes to your credit file depend on whether your IVA completes less than six years after the date your IVA started or more than 6 years.
If your IVA is completed in less than 6 years
Your credit record will be updated to say your IVA has completed.
The IVA marker will stay – it only drops off your credit record six years after the start of your IVA.
This applies even if you have repaid your IVA debts in full. This is very annoying as the IVA marker makes it impossible to get a mortgage at a reasonable rate, but there is nothing you can do to change this.
All the debts in your IVA should have a balance of zero. The ICO says the debts should be marked “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)“. How this is reported depends on what credit report you are looking at, but in practice it doesn’t matter providing the balance owed is zero.
CCJs in your IVA will not be changed – they cannot be marked as”partially satisfied”.
If all the above has happened correctly, then at the 6 year point:
- the IVA marker disappears from your credit record;
- some of the IVA debts may already have disappeared (because their default date was before your IVA started) and the rest should go at the same time as the IVA marker (because their default date is the same as your IVA);
- CCJs drop off six years from the judgment date, so they will already have gone by the six year point.
So all the problems should have vanished and your credit score will improve dramatically.
What happens if your IVA lasted more than 6 years
The IVA marker will disappear from your credit file within a week or two!
All the debts in your IVA and any CCJs will already have disappeared. Debts drop off 6 years after the default date, and this should have been on or before the date of your IVA.
Correcting problems
Get a list of the problems
To make sure everything is right check your credit records with the three Credit Reference Agencies because some creditors only report to one of them.
With all the problems below, you need to get the creditor to correct the problem. Don’t waste your time trying to get the credit reference agencies – Experian, Equifax and TransUnion – to change anything because all they will do is send your complaint to the creditor.
All complaints here should be in writing. Never try to resolve these problems on the phone or you will be talking to someone who probably hasn’t a clue what an IVA is.
Send the letter below recorded delivery to the Data Controller for the creditor (get the address from the ICO). Keep a copy of letters you send and the proof of postage.
This makes it sound as though these issues are hard – they aren’t! You send a simple letter to the right person and 99% of cases are easily sorted.
When and how to get a default date corrected
I suggest waiting at least 6 months after the start of your IVA before you do this. It can take a while for your IVA firm to inform all your creditors about your IVA and there is no hurry because your credit record is going to be dreadful for years anyway.
But it’s best to deal with this well before your IVA ends – you don’t want to add delays on afterwards.
Here is the letter to send to the Data Controller for the creditor:
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 the 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, tell your IVA firm.
If the creditor knows about your IVA but refuses to add or correct the default date, complain to the Financial Ombudsman. Attach copies of your letter to the creditor, proof of posting and any reply from the creditor.
This works! In one Financial Ombudsman decision, the Ombudsman decided that:
MYJAR hasn’t explained why it has departed from [the ICO’s guidance] and I can see no good reason for it to have done so.
If a creditor doesn’t mark the balance as zero when your IVA is completed
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 just a few months, your file will clear itself then so it’s probably not worth bothering with this.
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 Financial Ombudsman as above if the entry is not corrected.
NB 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.
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. So CCJs will remain on your credit record with a balance showing and you can’t get this changed.
What if your debt is sold after your IVA starts?
This is pretty common.
Here if the default date is wrong, you should complain to the creditors who owned the debt at the start of the IVA. When they correct it, the current creditors will also have to correct their record.
If the balance isn’t showing as zero, you complain to the current creditor.
Is it worth doing this?
Even if you have no intention of getting more debt, a good credit score makes it easier to rent a house or get a mobile contract. And it’s essential if you want to buy a house or re-mortgage at a good rate.
It is definitely worth correcting the dates of default unless they are only a few days or weeks late.
If default dates are late or missing, they 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.
Getting the balances set to zero 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, if the balances are all zero, although this doesn’t improve your credit score at all, it may be enough for you to be approved for a ‘bad credit’ card, see below.
A zero balance 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. If you don’t, when your credit record becomes clean, it is also very empty with nothing good showing.
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.
Then there are two options.
1) get a credit builder card
Then apply for a bad credit card – well-known brands are Vanquis and Aqua. Avoid one you had a debt in your IVA to. 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 another card.
But these cards are too often the slippery slope back into problem debts. Read Bad credit cards and how to use them before you apply for one:
- your credit rating will not improve faster if you leave a balance on this card
- your credit score gets the biggest boost by using the card every month once for something small and repaying the card in full every month.
2) Save with LOQBOX
This lets you save money every month for a year and reports this to the credit reference agencies as a loan you are repaying, so your credit score improves. When all your IVA debts go, there is then this simple loan that you have repaid on time so your credit score is good! See how LOQBOX works for more details.
This all 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 selling 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.
It doesn’t make any difference if you settled your IVA early
If you settle your IVA early, your credit record doesn’t automatically improve, as the IVA and the defaulted debts in it will still stay for 6 years, see Settling your IVA early and its effect on your credit score.
What happens when your IVA ends?
7 different ways to save every month
Improve your credit score for a mortgage
Tracy says
I have received my iva completion and the six years will be up in April. Two of the credits have marked the account as defaulted after iva date so I need to get this changed but they have also marked my credit file as missed payment every month for the last six years, even after the date of completion. Will this disappear when the default reaches 6 years or should this not be happening
Thanks
Tracy
Weatherman says
Hi Tracy
Once the default drops off so will those missed payment markers. If any of those debts don’t have a default marker on your credit report, ask the lender to add one.
Sara (Debt Camel) says
Have you checked if there is a default date marked on these credit records? If you are seeing missed payments this suggests that the debt has not been marked as defaulted which is wrong. See the article above which explains how to complain and get this corrected.
If it is confusing, look at the Statutory Credit Reports from each of the three credit reference agencies, see https://debtcamel.co.uk/best-way-to-check-credit-score/. These reports have all the details – they may not look so pretty but it is easier to see what you need.
Tracy Wales says
Hi yes
Both accounts have default but also marking as missed payment every month. One has the correct default date as 2nd April the other is incorrect as it is August, so after the iva was in place.
I was was worried because the one with incorrect default date is still showing a balance and marking as missed payment even thou the iva is settled. The other is showing as 0 balance and settled.
James Pearson says
Hi Sara
I have just finished my IVA early, one debt that wasn’t included in the IVA is showing on my credit file as missed payment every month and not default – next year this will be 6 years old, they were made aware of my IVA and the debt was before my IVA was created, is this debt automatically included in my IVA even though they didn’t make contact with my practitioner? And can I write to them to mark the debt as a default and satisfied now I have my clearance certificate?
Sara (Debt Camel) says
did you tell your IVA firm about this debt?
James says
I may have done but it’s not showing on my IvA however my practitioner told me that any debts before the IVA was agreed are automatically covered? Where do I stand with this? The lender hasn’t contacted me for any payment as they acknowledged that I’m under a IVA however on my credit file it still shows as under arrears and not defaulted, once I have my clearance certificate can I write to them or a credit agency to get this changed to satisfied?
Sara (Debt Camel) says
I think first you should talk to your IVA firm to check if this was included – it should have been.
Marie says
Hi, I have unfortunately had to fail my Iva after 3.5 years, I have received my failure report.
On checking my credit reports I can see now my Iva is showing as discharged/ satisfied?
Does this mean the creditors on my Iva can no longer chase me for money? Or does it just mean the Iva (legalities) no longer apply?
None of my original debts are showing on my credit report either.
I’m so confused.
Sara (Debt Camel) says
That is very disappointing.
Now your IVA has failed, your creditors can again start chasing you – but they may not… see https://debtcamel.co.uk/when-iva-fails/
if none show on your credit reports, does that mean they are all pretty old debts?
What sort of debts were they – credit cards, loans, overdraft, tax debts or what? This makes a big difference to what may happen next. And have they all been sold to debt collectors?
Sarah says
Hi there, I have a general question about applying for a mortgage after IVA has completed. Although credit record is now clear and score is good, mortgage companies ask if you’ve had an IVA within the last 6 years. Although it’s not on the record anymore you’d have to answer yes to this. How does this affect mortgage application success?It seems as though it could be a total of 12 years before you can say ‘No’ this question! (i.e. a full 6 years since IVA ended).
Sara (Debt Camel) says
Some lenders may not mind, they just want to know what has happened. Do not apply direct – go through a broker and explain your situation.
Christopher says
I have just completed my IVA, which started in Feb 2017. However on my credit file it shows two CCJ’s, as paid dated June 2018 & October 2018, one of them is in a shorter version of my name, which I never use. I can’t understand why these are on there after my IVA started
Is there anything I can do, as obviously these are going to stay on my credit file a year longer
Sara (Debt Camel) says
So your IVA will drop off in Feb 2023.
shows two CCJ’s, as paid dated June 2018 & October 2018,
those are presumably the judgment dates of the CCJs? not the dates they were paid?
(sorry for late reply – your comment went into spam for some reason)
Daniel says
Hi,
I entered into an IVA in June 2017 and all of my creditors marked the relevant account as defaulted. I have since paid off my IVA in full and received a certificate of completion in March 2019. As such, I expect to be discharged in June 2023, as per the 6 year time period.
When I go into my credit file, I can see that for some creditors, the debt was marked as satisfied when I entered the IVA in June 2017 and this was the last date a default was marked on my account, whilst for others, the debt was marked as satisfied when the IVA was paid off in March 2019 and there is a default mark against each month between June 2017 and March 2019.
Just to be 100% clear, can I expect that these defaults will all drop off my account in June 2023 (6 years after they were first recorded), or will they continue until March 2025 (6 years after they were recorded as satisfied). I’m hoping to buy a house once completed and I want to make sure it would have dropped off by then
Sara (Debt Camel) says
A debt will drop off 6 months after the default date recorded on the credit record. It doesn’t matter when the debt was marked as satisfied.
It sounds like this is June 2017 or earlier for all your debts – which is what it should be. Then your record will be clean in after June 2023.
Daniel says
Perfect, thank you so much for clarifying.
Appreciated
Roland says
Hi there,
I’ve just completed my IVA within 2.5 years. I understand my IVA will stay on my credit history for another 3.5 years, there’s nothing I can do about it but can I already apply for a LOQBOX account to start improving my credit score? Please note I haven’t received my IVA completion certificate yet and not sure how long does it take to get it?
Many thanks,
Roland
Sara (Debt Camel) says
Until you get the completion certificate your IVA has not finished. See https://debtcamel.co.uk/end-of-iva/. It may take 6 months.
I suggest waiting until then to think about improving your credit score.
And the first thing to do is to check all the debts in your IVA are correctly marked as defaulted before or when the IVA started and now showing as settled.
LOQBOX will only make a marginal difference to your score while the IVA remains – it’s main purpose is so that you have some good things already there when the IVA has gone. It doesn’t matter if you do T start this for a year or more.
Roland says
Thank you Sara for your quick response. I see, I’ll follow your instructions.
James says
Hi, I have completed my IVA and it’s now satisfied, all creditors have shown as satisfied however I have one with EE that shows as default. I asked my practitioner about this and they say it wasn’t included in the IVA, I did tell EE about the IVA 2 years ago and they never chased me for the debt, I’m not thinking do I send them the clearance certificate and ask them to update as satisfied or will they come back after me for the debt plus interest? Should I leave this alone? Would it make a difference to my credit file if showing as satisfied?
Sara (Debt Camel) says
I did tell EE about the IVA 2 years ago and they never chased me for the debt,
telling the creditor is no good, you should have told the IVA firm.
do I send them the clearance certificate and ask them to update as satisfied
They are highly unlikely to do this. There is no reason why they should.
What is the default date on your credit record? Do EE know where you live now, or have you moved?
James says
Hi, I asked Experian to inform EE that my IVA was now satisfied, EE wrote back to them and asked them to ask me to send them the certificate but I haven’t done this as my practitioner said it wasn’t included in the IVA, no I haven’t moved address and haven’t had any correspondence from EE since I made them aware of the IVA back in 2020
And the EE default was back in 2020
Sara (Debt Camel) says
When did your IVA start? And does the EE debt date from before then?
With an unsatisfied default on your credit record, you will find it hard to get more credit. And if you do not settle the EE debt, it may be sold and the debt collector may go for a CCJ.
Should I leave this alone?
That isn’t likely to go well,
James says
My IVA was jan 19 and the EE default was may 2020, I understand your comment about it being better satisfied, however EE knew about my IVA and didn’t take any action and haven’t done so since, even if the debt was to be sold they would have to write to me to inform me and then offer me a repayment plan or pay it off in full, I could leave it and wait or shall I write to them with my certificate like they requested and see what they reply with?
Sara (Debt Camel) says
It isn’t EE’s job to get their debt added into the IVA – you should have done this. EE haven’t done anything wrong here. You can ask them to mark it as satisfied, I suppose they may, but there is no legal reason why they have to.
You can just wait and sort things out if they or a debt collector contact you. But the debt then stays on your record as unsatisfied.
James says
Also the EE account was opened before the IVA as it was a contract – I have the correspondence from Experian that I was going to send to the address EE gave them, I was going to send that and the certificate and see what they do, could they request I pay the debt and if so could they add interest? Given they haven’t done anything in nearly 3 years, do I have any rights?
Sara (Debt Camel) says
could they request I pay the debt
Yes
and if so could they add interest?
That depends on the terms of the contract but for a mobile it’s unlikely
Given they haven’t done anything in nearly 3 years, do I have any rights?
No. The debt will not become statute barred until 6 years after you last acknowledged the debt. Which you may just have done by asking them via Experian to mark it as satisfied.
Rachael says
Hi,
I started an IVA in Nov 2020, I completed this in Oct 2022 (certificate of completion received)
I had a debt included for Santander, that is still showing at the full amount on my credit report, and is marking a missed payment every month still – Can i contact Santander about this to get this resolved? as I have sent the certificate to transunion and they have advised they cannot update my report.
I also have 3 CCJS, two were entered at an old address – after my IVA started – would it be a good idea to request for these to be set aside? The court process is long winded and I havent been able to talk to them on the phone and do not want to waste time if this isnt possible.
I am looking to apply for a mortgage this summer, and have been told a 10% deposit and around 7-8% interest is what i am looking at which is fine for us. I just want to do anything I can to help the situation!
Sara (Debt Camel) says
Yes, complain to Santander – they should make the debt as satisfied or partially sayisfied with zero owing.
I also have 3 CCJS
were these all relating to debts in your IVA?
Rach Jenkins says
Okay Thankyou!
Yes all 3 related to debts in my IVA
Sara (Debt Camel) says
You can make an application to have the CCJs set aside – talk to National Debtline on 0808 808 4000 about what to do.
rachael jenkins says
Amazing I will, I assume I cannot ask for the CCJ for Santander to be put aside as this was before my IVA – the debt was included but the CCJ was issued before my IVA was agreed?
Sara (Debt Camel) says
That is correct – there should not have been a CCJ for any debts included in your IVA after your IVA started.
Nikki says
Hi Sara
I entered a IVA on June 2017 I paid it all and have my letter of completion but on my credit file all the tsb accounts are still sitting in default.. I have tried calling them but because I don’t know the account password etc they say there’s nothing they can do is there anything else I can try ? Also when my IVA gets removed this year will tsb accounts be removed aswell or will they stay on ?
Thanks
Sara (Debt Camel) says
Are the default dates for these debts on or before June 2017?
Nikki says
Yes they were before after then it says there is no data to the payments on clear score .. it’s says they was last updated in October 21 but have never changed to satisfied/settled
Sara (Debt Camel) says
ok then these TSB debts will drop off your credit records in June or before.
The debts should show as satsfied or partially satisfied with zero owing from the completion date of your IVA. If you want to get your credit records chaged to show this, you need write to TSB as it says in the “How do I request a right to rectification?” section of this page https://www.tsb.co.uk/privacy/. That says you can phone but I think you may get stiuck not knowing the passwaords… In your letter encluse a copy of your IVA completion certificate and also a couple of copeies of things whuch give your name and address for id purposes.
You may decide that for a couple of moinths this isnt really worth the trouble…
Rach Jenkins says
Hi Sara,
I sent off to the courts 6 weeks ago for certificates of satisfaction for my CCJs, still not cashed the cheques and no word from them. Is this normal? I do want to apply to have the 2 registered after my IVA started set asside, but I’m not actually sure who put them against me, as in who I owe the money too exactly, and I cannot get hold of the courts for love or money. Can I fill the forms in without this detail? As I have the court reference?
Sara (Debt Camel) says
I’m sorry I don’t know what the normal timescale is.
You cannot apply for a set aside unless you know the details of the CCJ. See https://debtcamel.co.uk/unknown-ccj-credit-record/
Greg B says
Hi Sara,
I have an IVA which started in June 2018.
In March/April 2019 I unfortunately missed two payments for my vehicle and defaulted on this.
The PCP finance company then informed me that they would be applying/petitioning to join the IVA (already in progress) as an additional creditor, for which their application was accepted by my IVA practitioner.
My question is; are they obliged to change the default date to be no later than the start date of my IVA, as they are now creditors named on my IVA and despite the default occurring 9 months after the IVA started?
Currently they claim the following:
“We have reviewed this matter and confirm there is no need to update the date of default on Mr B credit profile as although it would ordinarily show the date in which the default notice was first sent, the termination date is sufficient. With regard to Mr B stating it should be registered as the date on which they entered into their IVA, this is incorrect as the default would only be registered once they fall into default and just because they entered into insolvency does not mean that they were immediately in default of the agreement.
Therefore, there is no need to amended the default date on Mr B credit profile”
Any help or guidance you can provide would be greatly received.
Sara (Debt Camel) says
I don’t know of any specific guidance on this pretty rare occurrence. But really they have a point. It would be strange to add a default date at a point when you were making the normal payments.
Greg B says
Thanks for your reply.
I agree that it would be strange to record a default date at a point when I was making regular payments.
However, my response to that would be that they were admitted to the IVA along with existing creditors, and received a dividend upon completion along with those creditors, without having to abide by ICO guidance on the matter, as the existing creditors had to. Furthermore the dividend they received, included a share of payments I had made to the IVA, prior to the default with them and whilst I was still making these regular payments to them.
My argument would be, why are they allowed such special treatment (undue share of payments) compared to the other creditors, whilst also being afforded the opportunity to not adhere to ICO guidance?
1/2
Greg B says
Additionally, had I known at the time they were applying to be admitted to the IVA, that the default wouldn’t be moved back in line with the IVA start date, I’d have actively requested they not join the IVA and sought to explore other means by which the debt could be settled. As to me one of the key benefits of the IVA was to have everything consolidated and it all drop off my credit file at the same time. Should I have been made aware of this, or offered opportunity to explore other methods of repayment first?
I guess as you say it must be a rare occurrence, but I can’t help but feel like they’ve taken advantage of the situation to their own benefit, and at the detriment of my other creditors, whilst also being able (in a technical sense) to completely disregard normal IVA procedure/ICO guidance, to my own detriment.
2/2
Sara (Debt Camel) says
How much debt was written off in your IVA?
Greg B says
Upon settlement of the IVA, the total outstanding/written off was £14,691.28
Sara (Debt Camel) says
what percentage of the debts was that
Greg B says
About 65% if my math is correct.
Sara (Debt Camel) says
what happened to the car?
DARREN says
I’ve paid off my iva early as come into some money and cleared everything I owe paid up
My council tax for the year and invested in an Isa and my credit score went down !
Would it be helpful to get a bad debt credit card and pay off in full every month ?
Sara (Debt Camel) says
How long ago did your IVA start?
Have you checked all the debts in the IVA have been marked as defaulted on or before the start date of your IVA? And have now been marked as satisfied or partially satisfied with a zero balance owing?
mike says
Most of this information is now incorrect. The IVA will NOT drop off your credit file after 6 years from the start date.
The CRA’s have now added “if completed” to their policies, which means you have to show them your completion certificate or your IP has to tell them it’s complete. If your IP is anything like mine, this could take another 6 months.
Sara (Debt Camel) says
It has always been the case that an IVA drop off after 6 years or after your IVA has been completed – this is not a change.
Which was your IVA firm?