If you are struggling with high amounts of debt, your credit rating is most probably ruined already. So, when you think of entering an IVA as a solution, you don’t need to think that your credit rating will have to suffer. If you keep up with the scheduled repayments, in five years you can declare yourself debt free. If you have already passed the “test”, it is time now to start rebuilding your credit history:

• With a bad credit rating, it is unlikely that you will get a loan on good terms
  
  
• However, in order to start rebuilding your credit history, you need to take up at least a small unsecured personal loan
  
  
• You must keep up with the repayments, so that you regain your trustworthiness
  
  
  
• Only after you successfully go through the repayment program of a loan, will you be able to have access to other financial products that come on good terms and conditions

As seen, the steps you must take in order to see your credit record “healthy” again are not so many. The only requirement is that you stay away from any kind of debt, by trying to keep up with every single payment, on time. This way, you not only will improve your credit rating, but you will also learn to manage much better your finances. The IVA will help you to get rid of your debts as a program and as a concept, but it is really up to you whether you will also successfully complete it. Also, after you have finished it, it is up to you whether you will manage your finances responsibly, so as to stay away from debts in the future.

Perhaps the first step after you are through with the IVA is that you know exactly your financial standing, and what is stated within your records. You cannot start rebuilding something, if you don’t know how badly damaged that is. So, you should ask for a copy of your records from one of the credit reference agencies. You can ask one free copy per year. If you have a seriously damaged credit rating, it will take a much longer time until you can see it getting better. With a very low credit score, you have to take it slowly, and as a first measure find a loan provider who will grant you a small sum with average interest rates, and until you have fully repaid your debt, you will not use any other loan product.

Lenders are usually reluctant when seeing a damaged credit rating, so it is unlikely that you will get a loan on very good terms. You need to pay particular attention to some of the following aspects:

• At first, you would better take out a loan which’s repayment term is not very long (12 months – 18 months for example)
  
  
• Make a proper research in order to find a loan which comes with the lowest interest rates. You will most probably find more lenders who are willing to give you loans, but carefully compare the products
  
  
• Look for a loan which’s total value is not that high. You don’t need to borrow a very high amount of money; borrow little, and make sure to keep up with all the repayments, after all you re trying to rebuild your trustworthiness in the eye of the lender
  
  
• Be patient while re-constructing your credit rating. It may take one or two years until you can say that you have achieved to present a good credit score.
  
  
• Never make the mistakes you have made before the IVA. After all, you never want to find yourself in the same position (having debts!)

After a IVA, you can start looking for professional advice if you feel you cannot manage on your own. A money manager for example, will guide you through the process, and redirect you towards the most effective solution in your case. Never let the opinion of other influence you. They were not in the same situation as you, and you didn’t go exactly through what they went. It is better if you Act more responsibly, try to manage your finances on your own or with professional guidance. Protect your property in the future, which is the most important asset, and don’t take up secured loans unless it is really necessary to do so. Unpaid secured loans can quickly lead to situations like having your property repossessed. All in all, if you pay attention to some of the key aspects of personal financial management, you will definitely be able to improve your credit rating shortly after an IVA.