Applying for a credit card with an IVA

Find out what to bear in mind if you’re applying for a credit card during or after an individual voluntary arrangement (IVA).

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Can I apply for a credit card if I have an IVA?

If you’re considering borrowing money while you have an IVA, talk to your insolvency practitioner first. You’ll need their written permission to borrow more than £500 and they might be able to suggest a better option than taking our further credit.

They can:

review your budget and possibly make changes if it’s no longer working for you
make sure an IVA is still suitable for you

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Can I apply for other types of credit if I’ve got an IVA?

This guide is about credit cards but the information in it applies to all forms of credit, including:

credit cards
store cards
personal loans
payday loans
overdrafts
borrowing from friends and family

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How much can I borrow if I’ve got an IVA?

If you borrow more than £500 without permission from your insolvency practitioner, you’ll breach the terms of your IVA and it could be terminated.

You can borrow less than £500 without your insolvency practitioner’s permission, but that doesn’t necessarily mean it’s a good idea.

Should I apply for a credit card while I have an IVA?

A credit card application is less likely to be accepted if you have an IVA. And, even if it is, borrowing on a credit card during your IVA means you’ll have to make those repayments on top of your monthly IVA payment.

Think about whether you could afford this before applying.

Generally, it’s not advisable to apply for a credit card until your IVA has fallen off your credit report. An IVA will stay on your credit file for six years from its start date.

While the IVA remains on your report, you’re less likely to be accepted for a credit card and you’ll almost certainly face higher interest rates.

Can I apply for a credit card as soon as my IVA ends?

Your IVA will stay on your credit file for six years from the day it starts. That means, if your IVA ends after five years, it’ll stay on your credit report for another 12 months.

You’ll probably find that your credit card options are limited to those with very high interest rates while the IVA remains on your file.

The IVA should be removed from your credit report automatically after six years. If this doesn’t happen, send a copy of your certificate of completion to Equifax, Experian and TransUnion and ask for the IVA to be removed.

Even after the IVA falls off your report, you might need to build up your credit rating to get the best deals.

There are a number of things you can do to boost your credit score after an IVA, including:

checking you’re registered to vote
borrowing small amounts from lenders who specialise in helping people rebuild their credit rating
making repayments on time and in full to show future lenders you don’t pose a serious risk

Remember - making multiple applications in a short space of time can damage your credit rating, so use an eligibility checker to see if you’ll be accepted before applying.

Do I need to declare a past IVA?

Lenders can ask you to declare any past credit issues even after an IVA has been removed from your credit file. Being dishonest could be seen as fraud, so it’s always best to be upfront.