Missed payment number one reason for bad credit: Pepper Money
A single missed credit payment is the most common way for a borrower to be marked as having an adverse credit history, according to a Pepper Money study.
Almost three quarters, or 73%, of borrowers end up with a poor credit report thanks to “a simple missed credit payment”, explains the lender specializing in its study on adverse credit published today.
He adds that the second most common reason for a poor credit history is the lack of multiple credit payments, resulting in default, which was experienced by 35% of adults with poor credit.
The report states that 27% of people with lower than normal credit histories have entered into a debt management plan and 26% have unsecured arrears.
Just over one in five people with poor credit, or 22%, have been convicted in a county court in the past three years, down from 18% since the last research in fall 2020 .
The least common reason for bad credit is secured arrears, a loan taken on an asset, which was suffered by 18% of people with bad credit.
The report states: “Just over half (52%) of adults with bad credit who plan to buy a property in the next 12 months say they are concerned about their mortgage application being turned down because of their bad credit. credit history. ”
The study was conducted in March when the UK was still strictly on lockdown, but the vaccination program provided a roadmap for recovery.
He adds: “There is a clear trend that the pandemic will have a greater financial impact on customers with poor credit and we need to ensure that this does not result in these customers being withdrawn from financial products in the market. ‘to come up.”
Pepper Money Sales Director Paul Adams says, “There are well over 6 million people in this country who have had some sort of bad credit on their record in the past three years.
“Often it’s just one failed payment or multiple missed payments. More than two million people have received a defect, and nearly 1.4 million people have received a CCJ – including, of course, Boris Johnson, according to recent reports.
“The means by which people can get an adverse credit report and the circumstances leading up to it are diverse, but the unifying factor for all of these clients is that there are mortgage lenders who are able to make sound decisions based on their circumstances. individual and offer opportunities. to borrow the money they need to achieve their goals. “
Data group YouGov conducted an online survey for Pepper Money in March that included a nationally representative sample of 4,242 adults.