15 Million People have Adverse Credit

4th Mar 2024

Recent research carried out by a leading British financial services company has revealed that over 15 million individuals nationwide have faced historical credit challenges that could potentially hinder their ability to secure a mortgage. At a time where the cost-of-living crisis means that money is tight for many families, getting a mortgage approved is harder than ever. The recent study was designed to give independent advisors whose job it is to find mortgage products information about what issues affect people’s ability to get credit.

Some of the main credit problems leading to poor credit score ratings include engagement in debt management plans, county court judgments (CCJs), loan defaults, and instances of missed payments. Anyone can check their own credit score by registering with sites such as ours, which help you understand what information the banks and other lenders have about you.

Report Findings

According to the findings, nearly half (49%) of those who missed one credit payment went on to miss further payments, perhaps indicating a higher number of people who are experiencing ongoing financial issues rather than running into difficulties just once. Additionally, the study found that almost 13% of individuals who had experienced credit issues in the past three years also intended to purchase a home with the help of a mortgage within the next year, representing over 900,000 potential homebuyers struggling with a less-than-ideal credit standing. Perhaps unsurprisingly, the current cost of living crisis is also felt to be affecting those on lower incomes the most, and these groups are those who also have the lowest credit scores.

Knowing Your Credit Score

If getting on the property ladder is part of your plans for 2024, then it’s worth laying the groundwork now by checking out your credit report and getting your finances into the best shape possible ahead of starting a property search. The first thing to do when checking your credit report is to scan it for any obvious mistakes. If you point out mistakes such as accounts you don’t have to the credit referencing agencies, they have to put these right for you. The other “quick win” is making sure you are on the electoral register, or the list of people allowed to vote. Appearing on the register is the easiest way for lenders to make sure that you live where you say you do.

Some of the other techniques for improving your credit score might take a bit longer. If you have missed payments in the past, then demonstrating that you have changed your ways and can now be relied upon to pay regularly might take several months. Get into the habit of tracking your credit score number monthly, and identifying how changes you make are reflected in your numbers. Remember that a less than perfect credit score number won’t rule you out of the mortgage market completely, it might just restrict your choice to a smaller pool of lenders, with higher interest rates.