How Does an IVA Affect Your Credit Score?

illustration of How Does an IVA Affect Your Credit Score?

What is an IVA?

An IVA (Individual Voluntary Arrangement) is a legal agreement between you and the people you owe money to. It lets you repay your debts over an agreed time period (normally over 5-6 years). 

You can use an IVA to repay debts from: 

  • Bank overdrafts

  • Personal loans

  • Credit cards and store cards

  • Council tax arrears

  • Hire purchase debts

  • Money owed to HMRC

An IVA is arranged by a legal professional called an insolvency practitioner. You'll agree to a payment plan with your creditors which takes into account your situation and how much you can afford to repay at a time. 

An IVA stops you falling into more debt from increased interest, and gives everyone involved a clear timeline for when the debt will be repaid. When the IVA agreement comes to an end, you'll be free from the commitments to your creditors.

An IVA goes on your credit file and brings down your credit score. But the benefit is that your debts are frozen and no more interest accumulates which means you can make manageable repayments.

How long does an IVA stay on my credit report?

An IVA stays on your file for six years from the date it's approved. It’s marked as ‘complete’ when you've settled the debt, but it’ll stay on your credit report for six years. During this time, your IVA is visible to lenders. Any debts that were part of your IVA may be included separately on your credit report. 

Some lenders might ask you if you've ever been in an IVA, even after it's dropped off your record. If this happens, you should still be upfront about it - it'll be easier in the long run.

Can I remove an IVA from my credit report?

IVAs are added, marked ‘completed’ and then removed automatically from your credit file. If something doesn't look right then you can ask your credit reference agency to update it. You'll need to provide evidence such as a letter from your insolvency practitioner.

You can ask for a note to be added to your report, explaining why you got into debt and needed the IVA. For example, you could add a note saying you were made redundant or suffered from a long-term illness. Find out how to do this in our Guide: checkmyfile Explained*.

*Heads up, when you click through to our affiliate links, we may earn a small commission at no extra cost to you. We only recommend sites we truly trust and believe in.

How does an IVA affect your credit score?

Having an IVA will lower your credit score. And sadly, it will negatively affect your score for as long as you're in the IVA. You should make your repayments on time and in full, as defaulting will cause your score to go even lower.

Lenders view you as 'high risk' when you've had an IVA because they’ll see you've struggled to repay your debts in the past. Having an IVA can make things such as a mortgage more difficult, but not impossible.

When reviewing a credit application, lenders will check a number of factors. They’ll look at how long ago the IVA was, if you’ve made your repayments on time, and if you’ve had any other credit issues since. 

Most big banks and mortgage lenders aren’t set up to deal with complex cases, so if you’re looking to take out a loan after an IVA then it’s best to speak to our Mortgage Experts to find out your options.

Can I get credit while I’m still in an IVA?

It's difficult, but in some circumstances you might be able to get credit while still in an IVA.

The most important factor is how you behave following your IVA. If you make your repayments in full and on time and don't get into any additional credit issues, some specialist lenders might be willing to consider your credit application, like a mortgage. But most mortgage lenders like to see two years of good credit history following your IVA or other forms of bad credit before they offer you credit, or a mortgage. 

While you'll have some options for getting credit while your IVA is active, they'll usually come with small limits and high interest rates. You should consider any credit applications very carefully before you submit. Getting rejected hurts your score - don't apply for too many different loans at once, and stick with lenders who are likely to accept you. 

If you're looking for a mortgage with an active IVA,  speak to one of our Mortgage Experts to find out your options.

Can I get a mortgage with an IVA?

Yes, you can get a mortgage with an IVA. But it's more difficult than if you didn’t have an IVA in your credit history. 

Most lenders don’t like IVAs because it suggests you've had credit issues in the past. A lot of the big banks won’t consider you, but there's plenty of specialist lenders who will.

Unlike a lot of mainstream lenders, specialist lenders will make a decision based on your current situation and ability to make repayments, rather than seeing you have an IVA on your credit file and instantly refusing you. 

To get a mortgage with an IVA on your credit file, it’s best to work with a specialist mortgage broker who has the right experience to help you. Our Mortgage Experts know the specialist lenders who’ll consider you and which ones will offer the right mortgage rates for your needs. Make an enquiry

Do I need to declare an IVA on my mortgage application?

It’s best to be honest about an IVA on your mortgage application. Even if the IVA has dropped off your credit file after six years, most lenders will want to know about previous credit issues.

Be upfront and honest about any past credit issues. It’ll save you time and money. If you don’t let a lender know, you could end up paying fees to later get refused if they find out. Honesty is the best policy.

How long after an IVA should I wait to get a mortgage?

Most lenders will want your IVA to have dropped off your file (after six years) before they offer you a mortgage. 

Some specialist lenders might offer you a mortgage while it’s still active on your credit file, but these deals will be less competitive. Even specialist lenders will still prefer an older or 'completed' IVA. The less recent it is on your credit file, the more likely it is to accept you.

How are mortgages different after an IVA?

You'll have fewer mortgage options available to you after an IVA. You'll probably be asked to put down a bigger deposit or pay a higher interest rate, as this reduces the risk to a lender. A big deposit shows a bigger commitment, and more interest means a bigger return from their investment.

Your individual situation is unique, and what you might be asked to pay can vary between different lenders. If you've had an IVA it's best to work with a specialist mortgage broker - like us! Our Mortgage Experts know the market, can find the right lender, and help your application look as good as possible.

Can I remortgage with an IVA?

There will be restrictions on your home during the course of an IVA. Your agreement will include terms for your property that you'll need to follow. Check your agreement to find out what the restrictions are. Usually, you won’t be able to remortgage while your IVA is still in place. 

Six months before your IVA is due to end, you’ll get a copy of your agreement from your IVA provider. They’ll do this to review the terms of your agreement. During the review, your IVA provider or insolvency practitioner will:

  • Send you a copy of the property sections from your IVA proposal

  • Ask your mortgage lender for a statement showing the cost to pay off your mortgage

  • Carry out a valuation of your property

Afterwards, they'll let you know what to do next. You should check your credit rating at this point, so you know exactly where you stand and how you’ll look to lenders. You should then work with a mortgage broker to find the right lender for your needs.

How can I improve my credit score after an IVA?

We know first-hand how demotivating bad credit can be. There’s always the worry that you might not get accepted for credit if you need it. The best thing to do is check your credit score regularly and see what you can do to improve it. We recommend using checkmyfile. Their service provides a detailed overview of your credit record. You can sign up for a free 30-day trial. After the trial period, the cost is £14.99 per month, and you can cancel anytime.

Here are our top tips to improve your credit score after an IVA:

  1. Check your credit report regularly
    You should check your credit report and keep an eye out for anything new. We recommend checkmyfile. It’s the most thorough credit checker in the UK. It’s always good to know where you’re at and sometimes errors can be made, so it's worth investigating if something doesn’t seem right. You can contact the company that billed you incorrectly and they'll put it right. You should also check your basic personal information for any mistakes or old data. 

  2. Register to vote
    Get on the electoral roll at your current address. This makes it easier for lenders to prove your identity. See if you’re on the electoral register by visiting the website.

  3. Reduce your use of credit 
    Using credit responsibly can make your report look good. But you should check how much you’re using out of what's available to you (known as ‘credit utilisation’). Keeping your utilisation under 30% is usually a good rule.

  4. Don't rush to close old accounts 
    Unused accounts can work in your favour. They count towards your overall credit limit but help to keep your credit utilisation down. It’s fine to have old accounts open - just remember to make repayments on time if you do use them.

  5. Protect yourself from identity theft
    Fraudsters take out loans or open up bank accounts in the names of other people. They don't care how hard you've worked to improve your report since your IVA, and will run up huge bills that damage your score. When you check your report, make sure you recognise everything on there. 

  6. Make sure you're named on the bills
    If you’re paying any household bills but your name isn’t on the account, it won't be counting towards your credit score. So if you’re paying on time, this good behaviour won’t be recorded and improve our credit score. You can have multiple people named on the bills, so make sure your name's on there.

  7. Don't apply for too much credit at once
    Avoid making lots of credit applications in a short space of time. When you apply for credit, lenders will carry out what is known as a ‘hard search’ on your credit history which is then noted in your report for 12 months. If you have lots of hard searches altogether, it looks to lenders like you're trying to get a lot of credit because you're struggling to manage your money. If you do need credit, just be wary of my many applications you're making. 

  8. Check your financial links to other people
    Your credit report includes anyone you share an account with. If you’re linked to someone who has poor credit, this can bring your score down. Shared accounts include joint banks accounts or credit cards If you don’t need to share an account anymore, it’s best to remove yourself from it.


Our Mortgage Experts are fully-qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

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