How an IVA affects your credit

Table of contents

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between an individual and their creditors. It allows you to pay back one monthly affordable repayment and the creditors often agree to write off a certain percentage of your debts. Your credit score is a number that indicates to lenders how likely you are to repay your debt. If you are in an IVA then this will indicate that you have previously not been able to pay back your debts and therefore will impact your credit score. This article/video will answer your questions about how an IVA affects your credit.

In the video, John Webb from Experian, explains how an IVA affects your credit score, credit report and credit rating.

When does an IVA get recorded on my credit file?

Details of your IVA are legally recorded onto the Insolvency Register which is shared with credit reference agencies. This information on your credit file is updated monthly, so it will appear shortly after the start date of your IVA.

An IVA is recorded on a credit report for 6 years from the day that it starts. If it does get extended beyond 6 years, it will remain on your credit file until it finishes and then drops off. If your IVA finishes after 5 years. It will take another 12 months to disappear from your credit file.

How an IVA affects your credit file

Your IVA will be recorded on your credit file for lenders to see. As it indicates you have struggled to repay debts in the past it is important for the lenders to have this information.

If you are in an IVA, it is important to remember that you cannot borrow more than £500 without your IVA Supervisors permission.
Your employment could be affected, although most jobs do not carry out regular credit checks, if they did then they would require your permission to do so. Jobs that may be affected if you’re in an IVA are:

Accountants
Bankers
Insolvency Practitioners
Some public services such as The Police, Fire Service or Prison Service

There are no rules within IVA legislation stating that an employer must know about an IVA unless it is stated within an employment contract – so always check this document.

Will it affect other people that I live with?

No. It is a common misunderstanding that your debt will affect others living in your household. An IVA won’t affect other people you live with unless you have a joint or linked IVA with someone else living in your household.

If you have a financial association with someone else in your household i.e. you have a joint mortgage or a joint account then your credit reports will be linked. You can see who you are financially linked to on your credit score, and if you are no longer linked then you need to contact the credit reference agencies and ask for a financial disassociation.

Thinking about an IVA but unsure what’s right for you?

Get free debt advice online or call 0800 316 1833 to speak to one of our experts. We’ll explain the solutions available, check what you may be eligible for and help you choose the option that best fits your situation.

See if an IVA is right for me

Table of contents

FAQs

What if I become seriously ill?

Please contact us as soon as possible. We know these conversations can feel difficult – but you’re not alone, and our dedicated Vulnerability Team is here to support you with care and practical guidance.

Your Insolvency Practitioner (IP) may speak to your creditors and request early completion of your IVA on compassionate grounds.

What happens if I come into money during my IVA?

If you receive a financial windfall – such as inheritance, compensation or lottery winnings – you’ll usually need to pay all of it into your IVA.

Because your creditors have agreed to write off part of your debt at the end of your IVA, any extra funds must be considered.

If the amount’s large, you may be able to offer an early Full and Final settlement.

If friends or family want to help with a lump sum, creditors may accept it as a settlement offer. It doesn’t have to cover everything you owe, but it must be fair and reasonable.

Can I settle my IVA early?

Yes – you can ask to offer a lump sum as a Full and Final settlement.

Your creditors will vote on the offer at a Variation Meeting.
Even if accepted, your IVA stays on your credit file for six years from the original start date.
It remains on the Insolvency Register for three months after completion or termination.

Early settlement can give flexibility, but you’ll still need to rebuild your credit after it completes.

Can I add debts to my IVA?

Because an IVA is a legally binding agreement, adding new debts can be difficult.

Forgotten debts: If a debt was missed at the start, it may still be possible to add it. Sometimes a second Creditors’ Meeting is required if the debt is significant.
New debts: If you’ve taken on new borrowing since your IVA began, contact us immediately. We’ll explain your options and what this means for your arrangement.

Can an IVA affect citizenship?

Your IVA will appear on the Insolvency Register, which may be visible during a citizenship assessment. It doesn’t automatically prevent approval – and in many cases, it reflects that you’re actively managing your debts responsibly.