8.3m impacted by adverse credit in past three years

Around 8.3 million individuals have experienced adverse credit in the last three years according to research by Pepper Money.

Those who say they’ve missed a credit payment, nearly half (46%) say they have gone on to miss more than one payment. However, 1.76 million potential borrowers with adverse credit have plans to buy a property in the next 12 months.

The reasons for missed credit payments included difficulty managing money (30%), reduced income for a period (27%), increased expenditure (22%), and job loss or illness (15%). 

The research also showed dthat that the cost-of-living crisis has left 36% of adults believing homeownership is impossible. The study, which surveyed more than 4,000 nationally representative adults, highlighted that 22% of respondents believed it would take more than five years to be in a financial position to purchase their own home.

36% believed they would never be able to own a home at all. Among those with adverse credit, the figure rose to 45%.

The ongoing cost-of-living crisis has heightened concerns about finances, with 61% of respondents expressing worry about its impact. Furthermore, 78% agreed that the cost-of-living crisis has made obtaining a mortgage more challenging.

Many adults are feeling the strain; 73% indicated that a £100 monthly rise in bills would significantly impact their finances, and 57% reported a decrease in disposable income.

Meanwhile, 32% of people said they would consider moving out of their area to save money, whereas 64% would not.

Paul Adams, Sales Director at Pepper Money, said “The research found that, despite the significant growth in the number of people with adverse credit, there continue to be many misconceptions amongst mortgage customers.

“The fact nearly a fifth of people think they would need to wait longer than five years to apply for a mortgage following a CCJ is concerning, given that they could access the mortgage market within months of a CCJ.”

“This presents a great opportunity for brokers and the wider industry to raise customers’ awareness about the options available to meet their individual financial circumstances.

“If we continue to let these misconceptions prevail, we’re not only stifling potential growth in the mortgage market, but we’re also limiting the opportunity for customers to pursue their goals and live the lives they want.”