Will an IVA Show Up on a Credit Check?

If you find yourself in debt, you might be wondering what your options are and what is the best route to take to keep your finances secured. Taking out loans can be difficult, and depending on your situation, you may not be eligible or approved for certain loans under the quantity and rates that are best suited for you. You don’t want to dig yourself deeper into debt after all. So you are considering an IVA, and if it is best for you. You want to know if it will show up on your credit checks and if it will impact you in the long run. 

The following should help dispel any questions you might have and help support your query with enough knowledge to help you make a decision concerning your finances.

What is an IVA?

Before you get into anything, you want to know what an IVA is. An IVA is short for Individual Voluntary Arrangement. This is an agreement that you choose to make with your credit company or anyone that you owe money to. The people you owe money to must agree to an IVA. This agreement is a way for you to organize your payment methods in a way that works for you over a period of time in which you pay at a lower rate. This means of credit repayment can also help you cut down on the total amount you owe, depending on the contract agreement terms you come to with your creditor. 

These payments are made monthly and are typically more manageable and affordable. These payments can also be adjusted to your ability and how much you can afford to pay, and in this way, can help you minimize or stay away from endless debt. Choosing this route of repayment means that under contract you will be protected against legal action if you are able to make payments under an agreed-upon amount.  

Will an IVA show up on a credit check and how will it affect you?

Using Individual Voluntary Arrangement to make your payments on your debt will turn up on your credit checks and stay on your credit history. Anyone or any party that you owe money to will also be notified. According to Scottish Trust, access to this credit information can mean it is harder or more difficult to borrow money in the future, but since your credit history will still show prior debts anyway, IVA still becomes a reliable option for debt repayment. This, however, can mean it will be more expensive to you in the long haul when it comes to taking out loans or borrowing money. An IVA will usually stay on your records for approximately five to six years.  The status won’t change regardless of whether you finish paying off your debt or not, but that completion will be noted on your history.

Should you use an IVA?

An IVA is great to help you borrow money without having to use collateral. Having that peace of mind is great but because there is less security on the side of the lender this means that applying for an IVA may not always be met with approval. Besides that, IVAs can be complicated matters as there can be many differences when it comes to different borrowing terms and conditions. These will vary from contract to contract. It is important to consult experts. Experts can help you fully understand the extensive details of an IVA plan. It is advisable to seek professional help when it comes to financial decisions, as they will know the best strategy suited for you.

After individual voluntary arrangement

Just because you used an IVA in the past does not mean it should dictate your financial life in the future. You shouldn’t worry too much as long as you are being responsible with your money and budgeting, using your IVA as a learning method and better managing your money.  

Creditors won’t necessarily use your IVA as a determining factor, as they pay more attention and give more weight to your most recent borrowing history and transactions. And remember that once five or six years have passed since your IVA, that record will be removed from your history.

Money can be a great tool or a root of your stress. Borrowing money, even more so, can be confusing, and impact your long term plans. It is important to acknowledge what your situation is and see what your options are. Individual Voluntary Arrangements can be useful, but it is important to have the right information about it in order to understand if it is right for you. With any financial decisions, it is always best to consult a professional and seek out their help as they will have knowledge of the plan itself. And with their experience, they can help you assess your situation and help you make the best decision for yourself.