Can you pass a credit check with an IVA?
Many credit checks are not about borrowing, and you can pass those. Applications for new credit are much harder, and during the IVA you cannot take credit of more than £500 without written approval from your supervisor.
“Credit check” covers very different things. A lender deciding whether to give you a loan, a landlord referencing a tenant, a bank checking your identity and a phone company setting up a contract can all search your file. Only some of those involve borrowing, and only borrowing is limited by your IVA. So the honest answer is: you will pass some checks, you will struggle with most applications for new credit, and for anything over £500 you need your supervisor’s permission first.
What does the £500 rule in the IVA Protocol say?
The standard terms of the IVA Protocol 2025, which apply to protocol IVAs agreed from 1 July 2025, say:
“During the arrangement, you must not obtain any credit greater than £500 without the prior written approval of your Supervisor, except for public utilities, insurance policies or other contractual payments as provided for in your income and expenditure.”
In plain English:
- You need written approval before you take the credit, not afterwards.
- Contracts for utilities, insurance and other regular payments already in your budget are outside the rule.
- The rule says “any credit”. It does not exclude loans from friends or family, so check with your supervisor before borrowing more than £500 from anyone.
- The IVA Protocol 2021 had the same wording, so most older IVAs work the same way. Check your own proposal to be sure.
The wording does not spell out whether £500 applies to each agreement or to all your borrowing added together, or how a credit card limit is counted. If you are unsure, ask your supervisor in writing before you apply.
Breaking the rule counts as not complying with your IVA. The supervisor can send a notice of breach giving you one month to put it right, and an IVA that stays in breach can be ended. When an IVA fails, creditors can chase the full debts again, add back frozen interest and charges, and ask a court to make you bankrupt: see what happens if an IVA fails.
The rule is similar to the £500 limit in a debt relief order, where borrowing more than £500 without telling the lender can lead to prosecution. IVA or debt relief order? compares the two.
Which credit checks can you pass during an IVA?
This is a general guide. Every lender, landlord and supplier makes its own decision.
| Check | Is it borrowing? | Does the £500 rule apply? | What to expect |
|---|---|---|---|
| Checking your own file or using an eligibility checker | No | No | A soft search, invisible to other companies |
| Opening a basic bank account | No | No | Banks cannot use your credit rating to refuse a basic account |
| Tenancy referencing | No | No | The landlord decides; see renting with an IVA |
| Energy, water, broadband or a SIM-only phone plan | Usually a service contract | Outside the rule if it is in your budget | Suppliers may run a check, but these are not loans |
| Insurance | No | Outside the rule | Premiums are part of your budget |
| A phone contract that pays off a handset | Paying for a handset in instalments may be credit | Yes, if that credit is over £500 | Ask your supervisor first |
| Buy now pay later | Yes | Yes, if over £500 | Regulated since 15 July 2026, with affordability checks |
| Credit cards, loans, overdrafts, store cards, catalogues | Yes | Yes, if over £500 | Hard to get while the IVA is active, and expensive if you do |
| Car finance (hire purchase or PCP) | Yes | Yes | Needs approval; see IVAs and car finance |
| A new mortgage or remortgage | Yes | Yes | Needs approval; see mortgages and IVAs |
| Employer vetting | No | No | May show your IVA; see will your employer find out |
Does a soft search show your IVA?
A soft search still looks at your file, so an eligibility checker takes your IVA into account. What makes it “soft” is that other companies cannot see it happened. Experian says soft searches “aren’t visible to companies” and have no impact on your score.
A full application leaves a hard search. Each one is recorded, and Experian says most stay on your report for 12 months. A string of hard searches followed by rejections can make the next lender more cautious. That is why an eligibility checker is worth using before you apply for anything, during the IVA or after it.
How do you ask your supervisor for approval?
Ask in writing before you apply, and wait for written approval before you sign. It helps to explain:
- what the credit is for, for example replacing a car you need to get to work
- how much you want to borrow, over how long, and the monthly cost
- how the payments fit into your budget without cutting your IVA payment
- what you will do if the application is refused
If the need is an emergency cost you cannot cover, ask about a payment break instead. Your supervisor can agree breaks of no more than 9 months of payments in total over the IVA. StepChange advises: “Do not take out credit to cover an emergency cost.”
Want to know whether an IVA could work for you? Answer a few questions about your debts and income. It takes about 3 minutes, and it is free and confidential.
What happens to credit checks after the IVA ends?
The £500 rule ends with the IVA, but the IVA stays on your credit file, usually for 6 years from the start date and sometimes longer if the IVA itself lasted longer than 6 years. Until then, lenders who check your file will see it. Your chances improve as the IVA gets older, and once it drops off, most checks will no longer show it. See how long an IVA stays on your credit file and how an IVA affects your credit rating.
What do people get wrong about credit checks in an IVA?
- “Anything under £500 is fine.” You may not need approval, but the payments still have to come out of a budget that is already tight. Several small debts can cause the same problems as one big one.
- “A soft search means they cannot see my IVA.” The company doing the search can see your file. Other companies just cannot see the search.
- “Buy now pay later is not really credit.” It is, and since 15 July 2026 the lender has to check you can afford it.
- “Once the IVA is complete, I will pass everything.” The completion certificate ends the IVA, not the credit file entry.
What to do next
- Before any application, ask yourself whether it is borrowing. If it is, and it is over £500, get written approval first.
- Use an eligibility checker rather than applying and hoping.
- If you are struggling to pay for something essential, talk to your supervisor about a payment break or a reduction before you borrow. Free, impartial debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline: see where to get free debt advice.
For more on day-to-day life in an IVA, see life in an IVA. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser.
Common questions
What happens if I borrow more than £500 without approval?
It is a breach of your IVA terms. Your supervisor can send you a notice of breach giving you one month to put it right, and if it is not put right the IVA can be ended.
Will checking my own credit file show up to lenders?
No. Checking your own file is a soft search. Other companies cannot see it and it does not affect your score.
Does the £500 limit still apply after my IVA ends?
No. It is a term of the IVA, so it ends when the IVA ends. The IVA stays on your credit file for longer, usually 6 years from the start, so it can still affect applications.
Can my employer run a credit check on me?
Some employers carry out credit checks as part of vetting, and a check will show your IVA while it is on your file. Our guide to your job covers what that can mean.
Related guides
- How does an IVA affect your credit rating? Why an IVA lowers your rating, how it compares with other options, and how to rebuild afterwards.
- Can you keep your car on finance in an IVA? Keeping a car on hire purchase or PCP, handing one back, new finance and compensation payouts.
- Can you rent a home with an IVA? Staying in your current tenancy, rent arrears, passing referencing for a new home, and moving.