For people with debts over £15,000, an IVA (Individual Voluntary Arrangement) is a realistic way out of debt and back in control. You commit to making monthly payments you can afford, usually over a five-year period, and have the opportunity to write off some of your debt.

If an IVA is an option for you then it’s likely you already have a bad credit rating. When you start an IVA, it gets recorded and is passed on to credit agencies. This information will remain on your credit report until your completion. One of the advantages of Individual Voluntary Arrangements is that you can actually repair your credit rating.

Credit during an IVA

During an IVA you will be unable to borrow. You won’t be able to apply for credit cards or loans and must live purely off your income. You’ll have to learn how to live without using credit, which could take a while to adjust.

Credit after an IVA

On completing an Individual Voluntary Arrangement successfully, your credit record will be updated and you will be issued with a certificate to prove this. Information can remain on your credit report for up to 6 years. Because of this, you may find the first year after an IVA difficult to find lenders. But after the first year it should not be a problem to apply for credit cards or loans.

Finding out more about your credit information

Your credit information is held by credit agencies. You are able to check your credit history by getting a copy of your credit report. If there is any incorrect information or associations with people you are not financially involved, you can report this to the credit bureau to get the details removed.

The two main credit bureaus to contact are Experian and Equifax. They usually charge a fee of £2 to have the report sent to you.