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An In-Depth Look at Adverse Credit

By: Barry Scott

Adverse Credit’ is a term used to describe a less-than-perfect record of repaying credit commitments. Those with ‘Adverse Credit’ will have negative payment information on their Credit Report, such as a Default, Arrangement to Pay, an insolvency, or a mortgage repossession. The term can also refer to a series of late payments on a Credit Report.

Adverse Credit will affect your Credit Rating and as such your ability to take out finance. This information will remain on your Credit Report for six years from the date of account closure, after which time it will automatically be removed. This will continue to have a negative impact while it remains on your Credit Report, but it may become less significant the older it gets provided the rest of your Credit Report is clear of such negative information

Lenders often mention their policies if they will not lend to people with Adverse Credit. This is because it has been statistically proven that those customers are statistically much more likely to default on credit agreements than others without a slim or negative credit history.

As such, some lenders specialise in lending to those with Adverse Credit that operate in the sub-prime lending market. These lenders usually charge considerably more for credit to cover the additional costs of default, and of managing the accounts of those statistically more likely to miss payments.

Our friends over at Pepper Money have put together a document giving an in-depth look at adverse credit and its impact. For more information please find the PDF below.

View Document

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