For many, once the IVA is successfully completed they vow never to touch credit again. They speak of lessons learned and look back on the dark day’s pre-IVA when things so quickly became out of control. And they may well be right. Best to leave well alone and continue to live as during the IVA – on a careful budget – albeit with no IVA payment to make any more and enjoying the achievement of becoming debt free.
But even though we may resist a loan, a credit card or an overdraft – a good credit score could be more than useful for needs ranging from a mortgage to a mobile phone. Homeowners’ post-IVA may want to look for better deals and a poor credit rating will limit their options considerably. If we have aspirations to get on to the property ladder for the first time (or get back on to it) then the better the credit score the better the chances of getting a deal – especially a good deal accessing the lower interest rates. Similarly in an IVA we may have not had a problem renewing an existing phone contract, but may have struggled to switch providers or access the better offers.
It may also be worth having a good credit report in case the next job we apply does check your credit file. It’s not just bank ,managers that need a good credit file – plenty of jobs, especially if we are handling cash at all, will do a credit search.
So – a good credit rating may be a good thing, but how do we rebuild it, once the completion certificate has been issued. There are some step we can take:
- Check everything is up to date and accurate on your credit file. It may be 12 months after the IVA has finished that the IVA and debts come off the file – but you will need to make sure that they do. (The IVA will remain on your credit file for 6 years from the date it was approved). Ensure all addresses are correct (even a small mistake can be damaging).
- Ensure you are on the electoral roll. If unsure – contact the electoral office of your Council – or just phone the Council enquiries and ask to be put through.
- Consider taking out a specialist repair credit card from firms such as Barclaycard, Metro Bank, Aqua and Capital One. This may go against the grain having vowed never to go down this path again, but it really can help. The key is just to make a single small purchase and pay it off in full on or before the due date. Interest rates are likely to be high – so paying off in full is necessary.
- Don’t be tempted by overdraft offers.
- Check for fraudulent activity e.g. if someone applied for credit in your name – call the credit agency to explain.
- The longer you live at one address the better – lenders feel more comfortable if they see you have lived at one address for a reasonable length of time.