How the six-year mark works
The moment your IVA is approved by creditors, it is added to the Individual Insolvency Register — a public register maintained by the Insolvency Service. Credit reference agencies (Experian, Equifax, TransUnion) pick this up and add the record to your credit file.
The record stays on your credit file for six years from the start date of the IVA — not from the end. Because most IVAs run for 5-6 years, this often means the entry drops off shortly after (or shortly before) you complete the arrangement.
While the record is active on your file, mainstream lenders will decline most new credit applications. This applies to mortgages, personal loans, credit cards, mobile phone contracts and often even bank account applications.
What happens during the IVA
Your credit score will normally drop significantly when the IVA starts, because the accounts included in the IVA will be defaulted by their original lenders (if they were not already). Each default is itself a negative marker, and combined with the IVA record, most credit scoring models will put you in the "very poor" band.
Some IVA holders find their score gradually improves during the arrangement as the on-time monthly payments are recorded, but this is inconsistent — many lenders simply refuse to score anyone with an active IVA at all.
Bank accounts and existing credit
Existing credit accounts included in the IVA will be closed by the lender once the IVA is approved. Overdrafts, credit cards and store cards are the most common casualties.
Your current account may be affected too, particularly if it is held with a bank you owe money to. Many IVAs advise opening a basic bank account with a bank you have no existing debt relationship with before the IVA starts, to protect your day-to-day banking.
Mortgages and car finance secured against assets are usually left outside the IVA and continue as normal, though the lender will be aware of the IVA and may not agree to any variation of terms during that period.
Life after the IVA ends
When the IVA completes, you receive a certificate of completion. Your entry on the Insolvency Register is removed within three months of completion. The credit file entry drops off six years from the start date.
Some IVA-holders find that even after the record drops off, a mortgage application still gets flagged — because six years of missed or defaulted accounts leave a trail. Rebuilding credit deliberately (a credit-builder card used carefully, keeping accounts open, avoiding new borrowing) is usually the fastest route back to mainstream credit.