Will My Parent's House Be Blacklisted If I Do Debt Management Or An Iva?

Are you considering a debt solution but are worried about the effect it will have

if you live at home or in a property belonging to your partner? We look at whether this action will have a negative effect on the property or not.

If you are struggling with personal debt it is sensible to solve this with a solution such as a debt management plan (DMP) or individual voluntary arrangement (IVA).

These solutions will resolve the problem and get your finances back on track. Nevertheless, they do not come without some downsides. One of these is that your credit rating will be negatively affected.

The problems with your credit rating are not caused by the DMP or IVA. They would happen anyway if you reduce or miss your agreed debt repayments.

Properties are not blacklisted

It is important to understand that if your credit rating is affected, this is a personal thing. Credit ratings do not attach themselves to property.

For this reason, if you are living with parents or in a partner's property which does not belong to you their home will not be affected if you have a poor credit rating.

Having said that though, it is possible that other individuals living in the property may still be impacted in the short term.

The reason for this is that the credit reference agencies who maintain individual people's credit files sometimes mix up the records of people living in the same property.

As a result it is possible that the record about one of your debts and how it has been repaid may also be shown on another individual's file living in the same property.

This problem is even more prevalent between the credit files of people with the same surname.

Credit file check important

The only way to be sure that another person living in the same property as you will not be effected by your debt problem is for them to check their own credit file to ensure there are none of your debts recorded there by mistake.

For more information on how someone can get a copy of their credit file have a look at the self help manuals on our website

If anyone gets their credit file and identifies records which do not relate to them, they can apply to have these disassociated from their file. This will then ensure that their credit rating remains intact.

Of course, there may be many reasons why an individual has an application for credit rejected.

If this happens to someone living with you and they have checked their credit file and it looks fine, then the chances are that the reason is nothing to do with your debt situation. They have not met the credit criteria set out by the lender for some other reason.

The bottom line is that a property itself cannot be blacklisted because someone living in it has a debt problem.

It is possible for the credit records of different people living in the same property to be mixed up especially if they have the same surname. However, where this is found to be the case, a simple process of disassociation will resolve the problem.

by: Steve Jackson

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