The IVA Implication: What Effect Will An IVA Have On Your Credit Rating? The ability to avoid bankruptcy and getting debt free are the two main reasons cited for an individual taking out an IVA.

However, there is a greater IVA implication to be considered as well. However, whereas bankruptcy may affect your assets and long-term financial future, the IVA implication on your credit rating could be far more immediate.

Proposing an IVA is currently the fashionable way to manage and get out of debt, but many individuals do not think through the IVA implication on their credit rating before committing. It is therefore extremely important that the IVA implication is discussed with an expert advisor before anything is signed. If you are not sure what impact this may have on you in the future then ask!

The truth of the matter is that the IVA implication on your credit rating is likely to block your credit for the next three to five years, depending on how long your individual agreement lasts. Following that period, providing that you keep up with repayments then your credit score will actually be on the up. Although debt will have lowered your credit rating anyway, if you have an IVA then this will show up and ensure that it remains low until the debts are cleared.

However, the IVA implication on your credit rating will be positive by the time that the debt is actually cleared. When all repayments have been made and the agreement is complete then all remaining debt will actually be wiped out, thus having the IVA implication that your credit is ultimately restored and lifted. This turns the negative IVA implication into a positive one that may well be worth the three to five years wait!