More than 15 million people have a history of adverse credit like missed credit payments, defaults, county court judgements (CCJ), unsecured arrears, secured arrears or entering a debt management plan.
According to Pepper Money’s Specialist Lending Study, with over 6,000 people surveyed by YouGov, nearly half of people with one missed credit payment have then gone on to miss further credit payments.
It continued that around 13% of those with adverse credit in the last three years say they plan to buy a property in the next year.
This equates to around 900,000 potential mortgage customers with adverse credit in the coming year.
However, 84% of respondents said the current economic environment was making it challenging for them to secure a mortgage.
Cost of living taking its toll
Paul Adams, sales director at Pepper Money, said that this year’s Specialist Lending Study has been its “most comprehensive research to date and has provided more insights than ever before”.
He continued: “It’s clear that the cost of living crisis is taking its toll and is impacting those people with adverse credit the hardest. It paints a picture of challenge, but it also paints a picture of opportunity.
“Because it’s circumstances like these that are the reasons why lenders like Pepper Money exist. We work hard to develop the insights into what customers need, and we devise our proposition around those insights – not just our products and criteria, but also our service and the way we communicate throughout the process.”
Adams added: “We aren’t alone in our sector, and there remains good opportunities for people to continue to work towards their objectives when it comes to their home and mortgage.
“The secret to unlocking these opportunities is professional advice, and there has been no clearer call to action about the important role that mortgage brokers have in reaching out to new and existing customers to ensure they are able to make a positive difference to as many lives as possible.”
The full report can be found here.