How does an IVA affect my credit score?

An IVA will be recorded on your credit file for six years and will significantly reduce your credit score during that period. Obtaining mainstream credit, mortgages, or credit cards will be more difficult and more expensive whilst the IVA is recorded.

Can I open a bank account during an IVA?

Yes. You are entitled to a basic bank account during an IVA. Many high-street banks offer fee-free basic accounts that do not require a credit check. You should inform your Insolvency Practitioner of any new accounts you open.

IVA and Your Credit File – Bank Accounts and Rebuilding Credit

Your credit file

Your IVA is recorded on your credit file by all three main credit reference agencies (Experian, Equifax, and TransUnion) for six years from the date it was approved. Individual accounts included in the IVA may also show as in default or partial settlement; these entries typically expire six years from the original default date.

You are entitled to access your credit file for free from all three agencies. Check it periodically for accuracy and raise disputes about any errors with the relevant agency.

Bank accounts

Having an IVA does not automatically close your bank account, but some banks may withdraw facilities such as an overdraft, particularly if they discover your IVA or if they are a creditor included in the IVA. If your main bank account is with a creditor in your IVA, open a basic bank account with a different provider. Several banks offer accounts without a credit check, including some high street basic accounts, Monzo, Starling, and Post Office accounts.

Obtaining credit during an IVA

Your proposal will almost certainly restrict new credit above a specified threshold (commonly £500) without your Supervisor's consent. Breaching this is a material breach of the arrangement. Even within the allowed threshold, obtaining credit during an IVA is difficult in practice — most mainstream lenders will decline applications from people with an active IVA. If you need to obtain credit above the threshold, ask your Supervisor first and get their consent in writing.

Mortgages and property

Obtaining a new mortgage while in an IVA is very difficult. Most high street lenders will not lend to someone with an active IVA. If you already have a mortgage, you can usually continue with it. However, remortgaging to a new deal is challenging for the same reasons, which has implications for the equity clause: if you are required to attempt a remortgage and it is genuinely impossible, your Supervisor should accept this. After your IVA completes and falls off your credit file, you may be eligible for a standard mortgage.

Rebuilding your credit

Steps you can take include:

Electoral roll: Register at your current address — one of the most straightforward ways to improve your credit score.
Credit-builder cards: Some lenders offer credit cards for people with poor credit histories. Use one responsibly — spend a small amount and pay it off in full each month. During your IVA, this may require your Supervisor's consent.
Regular payments: Maintaining a clean record on active accounts (mobile phone, utility bills in your name) contributes positively to your profile.
Check your file: Review all three credit files and raise disputes about any errors.

Other financial products

Car and home insurance are generally available regardless of an IVA, though always answer application questions honestly. Mobile phone contracts typically involve a credit check; some networks may decline an application during an IVA so a pay-as-you-go or SIM-only plan is an alternative. Hire purchase and lease agreements require your Supervisor's consent if above the credit threshold in your proposal. There is no restriction on opening a savings account or ISA during an IVA, though savings levels may be factored into your annual review.

Credit and finances