FAQs

What Is Adverse Credit?

Adverse credit is the term that is used to describe a poor credit history. When people have adverse credit listed on their credit record, it tells lenders that the individual has struggled to manage credit in a healthy manner in the past.

Failing to keep up with paying credit commitments will contribute to a person having adverse credit and this is seen as a negative. Additionally, a series of late payments can also result in someone having adverse credit on their credit report.

Having adverse credit will mean that an individual will find it difficult to access finance, as many lenders have policies against lending to people with adverse credit. However some secured products are still on offer for these ‘turnaround’ situations.

When someone takes out a form of credit, the lender will report to credit reference agencies to notify them about whether you have made your payments on time – and in full. Each time there is a missed or late payment, lenders will contact these agencies and the borrower will get a ‘red tick’ on their record that remains there for up to 6 years.

If there are missed or late payments on someone’s credit report, these will flag up to lenders when they do a credit check. Some lenders may refuse to lend money entirely, where as other financial providers may choose to give a business the money they require, but with an interest rate adjusted accordingly. Individuals can check their credit score online for free with ClearScore.