An IVA and Your Credit, Question by Question
How an IVA affects your score, and how you recover afterwards.
Will an IVA affect my credit score?
Yes, it will lower it. An IVA is a formal insolvency solution, so it is recorded on your credit file and marks your score down while it is in place. There is no avoiding this; it is part of how an IVA works. The important context is that, for most people, their credit is already damaged by missed payments and defaults before the IVA even begins.
How much damage does it do?
It depends on your starting point. If your credit was still healthy, an IVA will lower it noticeably. But many people enter an IVA after months of missed payments, defaults or CCJs, which have already harmed their score. In that situation, the IVA does not so much cause fresh damage as formalise a position your file already reflects. Either way, it is recorded clearly.
Doesn't an IVA also stop further damage?
Yes, and that is easy to overlook. Once your IVA is approved, the spiral of new missed payments, default notices, CCJs and creditor action generally stops. Interest and charges are frozen, and your included debts are dealt with under one arrangement. So while the IVA itself is a negative marker, it also draws a line under the steady stream of damage that unmanaged debt causes.
Can I get credit during an IVA?
Mostly not, and that is by design. While the IVA is active, your impaired file means mainstream lenders will usually decline you, and you cannot borrow more than £500 without your supervisor's permission anyway. The arrangement is about clearing debt, not taking on more. Any credit you could get would be from specialist lenders at high rates, which is rarely a good idea mid-IVA.
How long does it affect my score?
Six years from the start of the IVA. The marker stays on your credit file for six years from the date the IVA began, not when it finished. For a typical five or six-year IVA, that means it drops off around the time you complete, or within a year or so after. Once it has gone, lenders no longer see the IVA itself when assessing you.
Can I rebuild my credit afterwards?
Yes, and many people do so successfully. After your IVA completes and the marker clears, you can steadily rebuild: registering to vote, keeping every bill up to date, using a small amount of credit responsibly and never missing payments all help. It takes time, but a clean record after an IVA can recover well. The IVA is a step towards a fresh start, not a permanent black mark.
Will the IVA show even after it's paid?
For a while, yes. Even once you have completed your IVA, it remains on your credit file until the full six years from the start have passed, marked as completed. After that it is removed automatically. You are also listed on the Individual Insolvency Register during the IVA, and taken off three months after it finishes. Our guide on how long an IVA stays on your file covers the timings.
Should I get advice?
Yes, especially to understand the trade-off. A free, impartial adviser can explain honestly how an IVA would affect your credit compared with your current position and other options, so you go in with realistic expectations. For many people the hit to their score is outweighed by finally dealing with the debt. It costs nothing to talk it through before deciding.
