How to rebuild your credit after an IVA

This guide is for after the IVA: once you have your completion certificate, or are close to it. For how the IVA affects your rating while it runs, see how an IVA affects your credit rating, and for the exact rules on how long it stays, see how long an IVA stays on your credit file.

The honest picture is that there is no quick fix. The IVA entry stays on your files for a set period, and nothing you do removes an accurate record early. What you can control is whether your files are accurate, and what lenders see alongside the IVA.

How long after an IVA can you get credit?

You can apply the day your IVA completes. The £500 rule is a term of the IVA and ends with it, so you no longer need your supervisor’s permission.

Whether a lender says yes is another matter. The key facts document for protocol IVAs says your IVA appears on your credit file for 6 years from the date it starts. For a typical 5-year IVA that means about a year after your last payment, or longer with some agencies if your IVA itself ran past 6 years.

Experian says your score “should gradually improve” as the IVA ages, because lenders pay more attention to your most recent history. It also says the credit available to people with an IVA usually has “low limits and high interest rates”. So in the first year or two after completion, expect fewer offers and higher prices than you would have got before.

What should you do at each stage?

The completion and register timings are covered step by step in what happens at the end of an IVA.

How do you check your credit files are right?

There are three main credit reference agencies: Experian, Equifax and TransUnion. Lenders choose which to use, and the files can differ, so check all three. National Debtline says you can ask each agency for a free copy of your credit report under the Data Protection Act 2018.

On each file, look for:

• The IVA entry. Its start date, and that it shows as completed, not active.
• The accounts that were in the IVA. Each should show the right status and default date. Once the IVA is complete you are released from those debts, so they should not show as still in arrears.
• Default dates. Each default stays for 6 years from its own date. If a default date is much later than when you actually fell behind, ask the creditor to review it.
• Personal details. Your name, current and past addresses, and date of birth.
• Financial associations. People you are linked to through joint accounts or joint applications. If you are no longer financially connected to someone, National Debtline says you can ask the agency for a notice of disassociation.

If something is wrong, you have the right to ask the agency to correct or remove it. Send a copy of your completion certificate as evidence. If an account is shown wrongly, contact the creditor too, because the agency may need it to confirm the change. If you are not happy with how an agency deals with it, National Debtline says you can complain to the Financial Ombudsman Service or the Information Commissioner’s Office.

You can also add a notice of correction of up to 200 words explaining what happened. National Debtline says an application must then be referred for a manual decision, so a person reads your explanation, although that can take longer.

Why does the electoral register matter?

National Debtline says lenders look at whether you are on the electoral register, and that this “can be an important part” of their decision. It costs nothing to put right. Register at your current address on GOV.UK’s register to vote page, and again whenever you move.

Should you use a credit builder card?

Only with care, and only if you would clear it in full every month.

Experian says a credit builder card “could help rebuild your credit score if you use it well”, and that these cards “usually have low spending limits and high interest rates”. The idea is to use a small amount, such as a regular bill, and pay the whole balance by Direct Debit so you never pay interest. Experian’s general guidance is to keep the amount you use below 30% of your limit where possible.

Some other options, with the same caution:

• Sharing current account data. Experian Boost lets you connect your current account so Experian can look for signs of good money management, such as paying council tax. Experian says score increases are not guaranteed and not all lenders use this data.
• Eligibility checkers. They use a soft search, which Experian says is not visible to companies. A full application leaves a hard search, and Experian says most stay on your report for 12 months.
• Spacing out applications. Experian suggests “no more than two or three applications every few months”. Several refusals close together make the next one harder.

What slows people down after an IVA?

• Borrowing to “build a score”. Taking expensive credit you do not need adds cost and risk. The aim is a clean record, not more debt.
• Loans aimed at people with poor credit. These tend to be the most expensive products available. If you are thinking about one, read can you borrow money in an IVA? for what the price caps do and do not do.
• Paying for “credit repair”. National Debtline says to be careful, because you may be paying a company for something you can do yourself.
• Assuming the files updated themselves. Wrong information can stay until you ask for it to be corrected.
• Falling behind again. New missed payments are recorded and will weigh more than the old IVA, because they are more recent.

What about a mortgage?

Mortgages work a little differently from other credit. Some applications ask whether you have ever been insolvent, even after the IVA has left your file, and you should answer truthfully. See getting a mortgage after an IVA and do you have to declare an IVA after 6 years?.

What to do next

1. When your completion certificate arrives, save it and set a reminder to check all three credit files about a month later.
2. Register to vote at your address if you are not already on the electoral register.
3. Put every bill on Direct Debit where you can, so nothing is paid late.
4. Write down the date 6 years from your IVA’s start, and the default date of each old account, so you know when each should drop off.

If you still have debts that were outside the IVA and they are becoming a problem, compare your options in debt solutions compared. Free, impartial debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline: see where to get free debt advice. For more guides, see life in an IVA. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser.