Adverse Credit - Bad Credit

If you are a borrower with a history of defaults, arrears and other unsatisfactory actions, lenders will subsequently categorise your credit history as “adverse”. The terms; poor credit, bad credit and sub-prime credit all carry the same meaning.

Prospective lenders attain such data from the credit reference agencies, who are continuously informed of your willingness to maintain payments and meet your current financial obligations by your current lenders.

Remember; no one is automatically entitled to any credit. In order to successfully attain credit it is necessary for you to prove to lenders that you are credit worthy, by meeting your financial obligations.

Question: When is a persons credit history regarded as being “adverse, sub-prime or bad”?

In reality it's not the credit agencies but the lender that decides your credit score. Each lender has its own internal lending criteria, which ultimately defines the level of credit risk that they regard as acceptable. If your credit score meets or exceeds their guidelines, then you 'pass' their credit screening. If you score less than their guidelines, the lender may refuse your application, offer you a smaller sum than you had applied for, stipulate a higher interest rate or even request security for the loan. The decision is ultimately theirs (it is their money).

Question: Would you lend money to someone who has issues repaying other friends or family?

It is exactly the same for prospective lenders when they investigate you. But obtaining credit is often more difficult if you have an adverse, bad, sub-prime or poor credit history.

The way in which the individual lenders set their rules of acceptance means that your credit score could be acceptable to one but not to another. So don’t loose hope if you get declined simply class as this as a form of credit calibration.

However here are some of the main black marks that will harm your credit score - the last two being by far the worst:-

  • You're not on the Electoral Roll where you claim to be (domicile) living.
  • Multiple applications for credit - as they leave foot prints (marks) on your history
  • Payments that are over 30 days late on your mortgage or other loans - Defaults
  • Overdue payments on your mortgage or other loans - Arrears.
  • County or High Court Judgments for debts that have gone out of control.
  • Repossession of personal items to repay debts owed.
  • Recent Bankruptcy (undischarged bankrupts especially)

After reading the content on this page you should know if there is any chance that you will be judged as an adverse credit risk (bad credit - sub prime).

But in order to be absolutely sure we strongly advise you to attain a credit score from any of the top three credit reference agencies before you make an application (see the credit agencies page). Additionally as a time saving measure; you would be wise in taking the credit report to a FSA Regulated Financial Adviser who understands the current financial market and who will equally advise you on the most suited solution to your needs.

Bad Credit Repair

Ultimately it's essential that you try to build up a good credit profile, which will reflect in your credit score to prime lenders. This would subsequently provide you with access to a wide range of credit facilities with reasonable interest rates. To discover how to repair your bad credit history, please feel free to read the credit repair section of the remortgage market website.

Remember: Lenders could be relying on out of date or incorrect data, or even entries which could even relate to people who may have stolen your personal details, without even realising it, so always check your personal credit records.

Adverse Credit - Bad Credit Solutions

There are many Adverse Credit Solutions available in the current adverse market place:-

Adverse Credit - Bad Credit Loans

The days where bad debt meant - untrustworthy person, are long gone. It is clearly accepted that bad debt, often happens as a result of financial ignorance or exceptionally difficult financial circumstances. No one actually starts of in life with the aim of recording a default, arrears, ccj’s, repossession, iva or even bankruptcy.

Bad credit loans are designed specifically for providing credit, to people who have been categorised as having bad debts. A few years ago bad credit loans wouldn’t have been possible but as with every industry, the financial market has evolved bringing financial relief to those who have bad debts and associated bad credit. Feel free to read more about bad credit loans.

Remember: Just because you get approved for bad credit loan, it doesn’t give you the freedom to apply for any old amount. You don’t want to be back in the same situation again in a few years time; be rest assured it can easily happen.

Dis-advantages of Adverse Credit - Bad Credit

Adverse, bad credit or sub-prime solutions often carry significantly higher levels of interest as well as larger arrangement fees, simply due to the nature of today’s economics.

Debt Consolidation loans

Debt Consolidation loans are becoming far more popular, as people realise the needs to consolidate their ever increasing debts. It simply makes more sense to have one single manageable monthly payment as opposed to several larger and less synchronised payment arrangements.

These Debt consolidation loans can take the shape of a wide variety of Adverse Credit Solutions.

Debt Negotiation

No one wants to be in a position where they have to engage in debt negotiation; however many people in the UK turn to debt negotiation advisers when they finally realise, they can no longer manage to pay their debts at the current rate and move forward with their lives. They of course require some form of solution, but don’t really want to resort to an IVA or bankruptcy.

Debt negotiation is of course the most suited solution as opposed to the more radical options (IVA or Bankruptcy) in the initial stages of investigation. A debt negotiation advisers remit is to assist the borrower, to make life changing decisions that will improve their existing financial position, whilst teaching them how to maintain their financial stability for the future. Read More about debt negotiation.

Debt Management

Debt management companies take over the servicing of your debts in return for a fee. Instead of having to keep up with all your repayments to many creditors, you can now make a single payment to the debt management company who will divide this payment between the lenders you owe money to. This in itself can be a great weight off your mind, as the stress of keeping track of your repayments is removed. Read More about debt management.

Skip To Content