How does an IVA affect your credit rating?

There is no single credit rating. Each of the three credit reference agencies, Experian, Equifax and TransUnion, works out its own score, and each lender uses its own scoring and rules when you apply. What they all see is the same kind of information, and an IVA is one of the most serious entries a lender can find on your file. Expect it to limit what you can borrow, and what it costs, for several years.

Why does an IVA lower your credit rating?

Three things show up:

• The IVA itself. It is recorded on your credit file, usually for 6 years from the date it starts. It is also on the public Individual Insolvency Register while it runs.
• Defaults on the debts in it. StepChange says your creditors may record a default on each account, showing the original agreement was broken. Each default stays on your file for 6 years from the date of default, whether or not it is paid.
• What happened before. Missed payments and arrears in the months before the IVA are already on your file.

Lenders see a formal insolvency as a sign of high risk. Most mainstream lenders are likely to turn down new applications while it shows, and those that accept you are likely to charge more.

Is your credit rating already damaged before an IVA?

For most people thinking about an IVA, yes. If you have been missing payments for several months, your creditors may already have defaulted your accounts, and those defaults stay for 6 years from their own dates whatever you do next. An IVA adds a further entry, but it is not always the first mark on a file.

Every formal way of dealing with serious debt affects your credit file. This table compares them.

So avoiding an IVA does not protect your credit rating if your debts are already in default. The right choice depends on the whole picture, not just the credit file: see IVA or debt management plan? and IVA or bankruptcy?.

What can you borrow while the IVA is running?

Very little, and that is partly the point. Under the IVA Protocol 2025 terms you must not take credit of more than £500 without your supervisor’s written approval, apart from utilities, insurance and similar contract payments already in your budget. Even with approval, many lenders will not accept you while the IVA is active. Can you pass a credit check with an IVA? goes through which checks pass and which fail, and IVAs and car finance covers the most common reason people ask.

How long does the damage last?

The key facts document for protocol IVAs says your IVA will appear on your credit file for 6 years from the date it starts. Finishing early does not remove it sooner: the status changes to completed, but the six years still run. If your IVA lasts longer than 6 years, for example after payment breaks, some agencies keep it until it ends. How long does an IVA stay on your credit file? explains the detail, including how the agencies differ.

The effect fades before then. A lender looking at a file where the IVA was completed several years ago, with everything paid on time since, sees a different picture from one where the IVA started last month.

How do you rebuild your credit rating after an IVA?

There is no shortcut, and anyone selling one is selling something you do not need. These steps cost nothing or very little.

1. Check your file with all three agencies once your IVA ends. Make sure the IVA shows as completed, and the accounts in it show the right status and dates.
2. Register to vote at your address. National Debtline says lenders look at whether you are on the electoral register.
3. Pay every bill on time, including your phone, energy and any remaining credit. Late payments are recorded and can undo months of progress.
4. Use eligibility checkers before you apply for anything. They use a soft search, which other companies cannot see and which does not affect your score. A full application leaves a hard search, and Experian says most stay on your report for 12 months.
5. If you choose to use credit, keep it small and clear it in full each month. Credit builder cards usually have high interest rates, so they only help if you never carry a balance.
6. Space out applications. Several rejections close together make the next one harder.

Some people also add a notice of correction to their file, a short statement explaining how the debt happened. National Debtline says it can be up to 200 words.

What to do next

1. If you are in an IVA now, keep to the £500 rule and keep every other account up to date.
2. When your IVA ends, keep your completion certificate and check all three credit files within a few months.
3. If you are deciding whether to enter an IVA, remember your credit file is only one factor. Free, impartial debt advice is available from MoneyHelper, StepChange, Citizens Advice and National Debtline, and an adviser can go through the options with you: 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.