The Impact on Your Credit File
Yes — an IVA will significantly affect your credit score. As soon as your IVA is approved, it is recorded by the three main UK credit reference agencies: Experian, Equifax, and TransUnion. Your score will drop considerably and obtaining mainstream credit will be very difficult during the IVA.
Important context: If you are already missing payments and struggling with debt, your credit score may already be severely damaged. An IVA may not make things significantly worse — and it provides a structured path to recovery.
How Long Does the IVA Stay on Your Credit File?
The IVA entry remains on your credit file for 6 years from the date it starts — not from the date it ends. If your IVA starts January 2024 and runs 60 months (completing January 2029), the entry is removed in January 2030 — just 1 year after completion.
During the IVA: What Credit Can You Get?
While your IVA is active, your options are limited: basic bank accounts and prepaid debit cards are available. Most IVA terms include a clause restricting new credit over £500 without your IP's consent. Taking on new credit without notifying your IP may put your IVA at risk.
Rebuilding Your Credit After an IVA
- Register on the electoral roll — significant positive impact on your score
- Open a basic then standard bank account and maintain it well
- Apply for a credit-builder credit card — small purchases, paid in full monthly
- Check all three credit files — ensure IVA debts are marked as satisfied
- Keep credit utilisation below 30% of any new credit limit
- Avoid multiple credit applications — each hard search leaves a mark
IVA vs Bankruptcy: Credit Impact
| Factor | IVA | Bankruptcy |
|---|---|---|
| Duration on credit file | 6 years from start | 6 years from discharge |
| Public register | Yes | Yes |
| Employment impact | Lower risk | May restrict financial roles |
| Company directorship | Permitted | Prohibited while bankrupt |