Adverse credit is a term used to describe any negative information that appears on an individual’s credit report. It is also referred to as bad credit or poor credit. Adverse credit can include things such as missed payments, defaults, County Court Judgments (CCJs), or bankruptcy.
Adverse credit can have a significant impact on an individual’s ability to obtain credit, as it indicates to lenders that the individual may be a higher risk borrower. As a result, high street lenders may be less likely to approve a loan or credit application from someone with adverse credit, or may charge a higher interest rate to compensate for the increased risk.
A payday loan is not classed as bad credit (unless you did not pay it back). However, having a payday loan on your credit file could affect your mortgage choices.
Depending on the type and extent of the bad credit, it may be necessary to apply for a sub prime mortgage. A specialist bad credit mortgage broker will be able to help with this, as most specialist lenders only deal with brokers.
It is important for individuals to be aware of their credit history and to address any issues that may be affecting their creditworthiness. This can include taking steps to repair their credit rating, such as by paying off any outstanding debts or by disputing any incorrect information on their credit report.
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