Adverse Credit

What is Adverse credit history?

Adverse Credit History is a history of bad credit on your credit report. When you have adverse credit it can make obtaining a loan or credit card very difficult. Even if you are accepted it can be very expensive too.

If you have recently failed a credit check and you have adverse credit recorded on your credit report then at least you know why you have been declined. In this post we will look into what Adverse Credit is and what you can do about it.

What is considered Adverse Credit?

In the list below I provide some examples of what could be considered adverse credit.

  • A history of Defaults on your Credit Report.
  • A Bankruptcy.
  • A County Court Judgment.
  • An IVA.
  • A Debt Reduction Order.
  • Lots of late payments across multiple accounts.

If you have any of the above on your Credit File you will struggle to get accepted for credit. The Credit Reference Agencies are responsible for recording this information. Some of the information is pulled from public sources such as County Court Judgments, IVA’s and Bankruptcies.

What can you do about Adverse Credit?

If you have a history of Adverse Credit then the thing that will help you the most is time. The information above will normally not be reported after six years have passed. A Bankruptcy could be reported for longer in some cases but in general the amount of time is six years.

Having the examples listed above on your credit report means that you have had issues managing your credit and this is a huge turnoff for potential lenders. In fact there will be only be a few lenders who may be willing to give you a second chance. Anything from the mainstream lenders such as your bank will most likely be out of the question for the foreseeable future.

In terms of rebuilding your credit you should look after any of the credit you currently still have. You could also consider applying for a credit building credit card such as those offered by Vanquis or Aqua. Managing these well will put you on the road to recovery but the main thing is that the adverse data needs to be gone before things will dramatically improve and that takes quite a while unfortunately.

If you have a mobile contract keep making your payments on time. In fact any of your existing credit should be repaid on time and managed well as this will build the foundations to help you build a more solid credit history.

How do you get Adverse Credit?

Nobody would want an Adverse Credit History due to the reasons we discussed earlier. The way people can end up with this is when they have fallen behind on their repayments. If this happens over a sustained amount of time then what can happen is you end up with a default and things can escalate from there if you don’t take action.

If you then don’t pay the default you could end up with a County Court Judgement.

Some others have debts so serious that they can’t ever hope to repay them. In that case they may enter into a Debt Reduction Order, file for Bankruptcy or set up an IVA.

If you are struggling with debt then have a look at StepChange Debt Charity as they will be able to help you assess the situation and a way forward.

How can you check for Adverse Credit?

The best way would be to get a copy of your credit report. You can do this through Noddle as an example. You can read my Credit Karm Review if you would like to find out more by the way.

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