My situation post IVA - advice much needed please

[Jmartin]

Hello,

To give you a little background, I went into an IVA 6 years ago today which is due to come off my credit file at midnight tonight. I actually paid my IVA off in full 4 years ago though.

Now since then I have obtained a 98pound default on a mobile phone contract in 2007 when I moved house and thought my contract was up, but that was sorted years ago. I have a next directory account, a few pay day loans (obtained and cleared immediately with a view to helping credit file) and have a mobile contract running perfectly fine. I have private banking with natwest and a personal income of over 50k per year along with my partner who is on 20k per year on our joint account (which is our only account) my partner is currently on a debt management plan.

In February last year my parents had to take out a 15k loan for me due to a civil matter which I have maintained a standing order to their account for, for 287 per month since then, recently it was topped up by 5k to wrap up the remaining legal costs.

My question is, tomorrow, when my credit is clear (bar that one pesky default) and bearing in mind I have been with natwest for 2.5years now and always kept my account in good standing, in addition to the fact they will be able to see the payment to my parents going out on time every month and I have had existing credit recently that has been run fine, what are my chances of being able to get a loan to clear the loan for my parents (approx 15k) and if not that much, then what do you think they could offer me?

Also, I get a car allowance from work now, what are my chances of HP?

My credit score (for what that's worth) is currently 883 with th IVA on there

Many thanks for taking the time to read this

[ginger3232]

Welcome to forum - Jmartin it concerns myself that you are taking payday loan out (abeit to improve you rating) however they are average about £11 per day per £1000 - so you would be better trying for a high risk credit card. Avoid the payday loan completely

You have a default on you credit file - that will remain until its paid and a time elapse peroid occurs. You are also finanical linked to a partner on a DMP - through you joint bank aaccount.
Credit score means nothing as - all lenders score diffrently - if you are going to apply for credit (dont apply multiple times - as these leave footprints on your file). However you may find the default will cause issues.

Just because the six years of IVA is up - does not mean you will get credit - the hard bit is time /patience and a few good products

[St75]

Hi Jmartin - welcome from me too. I agree with ginger you should avoid payday loans. You would probably be accepted for a Vanquis credit card, which you can clear each month to build you credit file.

As for obtaining a loan, I'm not sure. Agree with Foggy that the default and associated account with a DMP may cause problems, but you never know. Saying that, it's now difficult for people with good credit files to get credit from some lenders.

[Jmartin]

The loan will just be in my name so her credit file would not even be looked at surely?

When I used to underwrite mortgages for a living, lenders would tend to be bothered about defaults within the last 3years even for their better products, so is a 4year old default for such a small amount really going to make a big difference?

Surely with my income taken into account, I can expect better than a vanquis (or similar) card? My credit will not be starting from scratch as I have had the payday loans, next account and mobile contract being dealt with in a proper manner already?

The reason I opted for payday loans to build credit by the way was because with the IVA on my file, I couldn't get any credit cards that I knew of

Thanks for the replies so far guys

[ginger3232]

If you are finanacial linked (ie joint account) this will be shown on your credit file.

Things have changed dramatically over the last few years as far as lending is concerned - the until midnight today you have a satified IVA on your credit file(this will put a lot of main stream lenders off) - if you do get credit you may find the interest rate is increased.
Experian issue a consumer leaflet about IVAs and their effect pre and post IVA. it does make it clear that immediately after an IVA - dont automatically assume you will get credit.

Also the fact you use payday loans - this will also be stated on your credit file - which may give an indication that you are NOT managing credit well - and relying on payday loans.- certainly if they are mutliple loans

As suggested perhaps a high interest credit card - would be a better option

[mattyboy]

Lending criteria have changed a lot recently. Usually any default on your file will end in instant rejection. This is because lenders have become much more risk averse as a result of the credit crunch. With a smaller pot of money to lend most places will not touch anyone with a default or multiple late payments. In the old days when available money was plentiful lenders would be much more free and easy with their money. Those days are long gone.

Lenders are restricting available credit to even their best customers so it may very well take time to rebuild your credit rating. They also look at listed financial associations so your wise credit file could affect your application.

[Jmartin]

Thanks guys.

Are you speaking from professional or personal experience here or is it your general view of the current lending Market at present?

I cannot believe Joe bloggs on 15k per year with perfect credit is more worthy than me because of a 98pound 4 year old default. Unless this is just a fact you know of?

[ginger3232]

Jmartin - most of on here are talking from personal experience - however some of us have and do read and investigate the information available - so we are offering advice based on this. However clearly you feel you are diffrent, may i suggest and refer youself to the credit agencies websites where there are mountain of up to date information about improving credit files etc.

The amount of salary (which you seem repeatedly able to inform us )is irrelvent - when it comes you your credit file - (this is not mentioned on your credit files).

[Jmartin]

I have worked in lending and I know salary is used as an under writing tool that is why. I am not flaunting it as you are clearly insinuating I am trying to get a full understanding of my options and all i am hearing is credit file, default, partners dmp etc and nobody seems to acknowledge that income matters when an underwriter reviews an application. If you are just talking about system generated applications them income means nothing, but it is not going to be a system application. When the IVA is off my credit file, how would a lender ever know it was there?

I agree regarding the payday loan comments by the way, it does suggest they were required as finances aren't being managed correctly, doh!!

[ginger3232]

I assume your Bank was one you had during the IVA ? - bank etc are allowed to keep their own records for a minimal 6 years after accounts close (money Laundering and PLC company Act) so if the bank was informed of your IVA - either by yourself /insovency register - so you may find they still have a record of your IVA,even after it drops off the credit files - also if you own a property, the mortgage lender would have been informed (all secure lenders would have been informed of your IVA), and restriction placed on the Land Register -after this information, may be kept thoughout the time the mortgage account is opened.

There are many way an old IVA will show - Not just the credit file

[luluj]

Personal opinion is you will find it hard to gain credit for a further couple of years despite your six years being up .... try and avoid pay day loans - they are so expensive!

[kallis3]

The other thing of course is, if you are asked on an application form if you have entered into an agreement with your creditors and you answer 'no', you could be in trouble.

[KAYKAY]

Also the IVA does not immediately drop of your credit file. From personal experience, we have had to write to Experian Credit enclosing the certificate and asking them to remove the IVA. 4 weeks later we got a letter saying they were going to write to the insolvency agency on our behalf, as they cannot remove the IVA without the Insolvency Agencies approval. This is despite us enclosing a copy of the completetion certificate. Our 6 year date was 12th July and the IVA is still showing. So don't expect it all just to fall off... you may have to put some work into clearing up your files.

[mattyboy]

I used to work for a major credit card company and the situation post credit crunch was that either you had a default or IVA on file the credit score was reset to 0 and it was an instant rejection. So yes, someone with a low income but who repays on time, borrows a little but keeps on top of repayments would be preferable to someone on a high income. When credit scoring the system looks for two things risk and profitability. A lot of people on high incomes would be rejected even if they had a perfect credit record because if they paid the full balance every month they were not generating any profit. Financial relationships are also important on your scorecard, it's better to have long relationships with financial institutions, a bank account held for many years even without an overdraft scores you well as long as they return the status OK every month. With mobile phone companies it's the same - best sticking to one rather than changing because it hows a continued financial relationship. Pay day loans do the opposite, short term borrowing repaid quickly can be negative and an indication you are overstretched on existing commitments, it would be better to have an overdraft instead.

Overall though you need to ask do you really want to return to a level of high unsecured boring? Whilst it's none of my business surely running up debt again isn't the answer.

[Broke of London]

Lending criteria is tough now. Hopefully your private banker can wrangle something for you...you're paying them to make life easy after all! x