We propose a novel integrated sensing and communication (ISAC) system, where the base station (BS) passively senses the channel parameters using the information carrying signals from a user. To simultaneously guarantee decoding and sensing performance, the user adopts sparse regression codes (SPARCs) with cyclic redundancy check (CRC) to transmit its information bits. The BS generates an initial coarse channel estimation of the parameters after receiving the pilot signal. Then, a novel iterative decoding and parameter sensing algorithm is proposed, where the correctly decoded codewords indicated by the CRC bits are utilized to improve the sensing and channel estimation performance at the BS. In turn, the improved estimate of the channel parameters lead to a better decoding performance. Simulation results show the effectiveness of the proposed iterative decoding and sensing algorithm, where both the sensing and the communication performance are significantly improved with a few iterations. Extensive ablation studies concerning different channel estimation methods and number of CRC bits are carried out for a comprehensive evaluation of the proposed scheme.