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[Sianb]

Hi. I have recently made my last payment into my IVA (March), and I believe I will get my certificate of completion sometime around October. Now, I want to apply for a credit card to start being able to demonstrate some history of credit, what is my best option? Secondly, our mortgage is currently in my husband's name, but he has just made a career change, halving his income, so when we're up for renewal (October 2014), will the mortgage company take my income into account?

[James Falla]

Hi there Sianb

If you want to apply for a credit card after completing an IVA to help rebuild your credit rating I would suggest you consider the Vanquish card from Provident. The card is available even to people who have poor credit ratings. You will not get a very large credit limit (probably c£500 to start off with) and the interest on outstanding balances is very high. But if you repay the card in full each month it is a good way of starting to build a history of using credit responsibly.

[Hayden]

Hi Siab

For help with improving your credit rating after your IVA is finished have a look at the following article which will really help you: Improving credit rating after IVA. It is also useful to start using credit so the credit card that James has suggested is a good one to get.

In terms of your mortgage for the mortgage company to take your income into account you would both now have to be named on the mortgage I think. However because your credit rating will still be poor this might have more of a negative than a positive affect. I would speak to a mortgage broker about your options. Remember you always have the option of staying on the current lenders Standard Variable Rate for the time being.

[Sianb]

Thanks for your help. I have applied for the Vanquish card as you suggested. I have also read the guide which was really helpful thanks

I am honestly not sure what is going to happen in regards to the mortgage. As you suggest it might be the best thing to stick with the SVR as it could even save us money. But I am just worrying about what will happen when interest rates start to rise eventually....

[Geraldine]

It is a sensible to get a Vanquish card Sianb but only use it if you can afford to pay it off in full each month as James mentioned.

I can understand that you are worried about your mortgage payments when interest rates start to go up. However I think you have some time before this happens. I was reading a news report this morning saying that the Bank of England have said that interest rates will not rise for 3 years. Of course you cannot count on this but I think it means that you do not have to make and rash short term decisions. If the IVA is coming of your credit file in March next year (6 years from the start date of your IVA) then it would be best to delay thinking about changing your mortgage until at least then.