Adverse Credit explained

Adverse Credit is the term used to describe credit problems that have been recorded on someone's credit file. It basically refers to anything that could negatively affect a credit rating.

The reasons that someone can have adverse credit vary, but often it will include issues such as missed payments, defaults, CCJs, as well as other financial and circumstantial factors. Visit our Credit Clinic for more causes of adverse credit. If you have adverse credit and you apply for car finance, it can affect your chances of being accepted for finance or the chances of you getting a low-rate loan.

Creditplus definition of Adverse Credit

Adverse Credit (also known as Poor Credit) isn’t necessarily the same as Bad credit. You could have Adverse Credit on your credit file due to a late payment, but that would not mean that you necessarily have a bad credit rating.

If you have had any repayment issues in the past, or if you have applied for finance several times in a short space of time, it's possible that you may have some form of adversity on your credit file.

An example of Adverse Credit is missing a payment on a loan that you have borrowed. When you miss a payment, the lender of that credit will advise the credit bureau (also know as the Credit Reference Agency) and they will add this to the credit file that they hold on you. This will happen each time you miss repayments, default on a loan, or receive a CCJ.

The more payments you miss, the more Adverse Credit records will be added to your credit file. This will have a big impact in calculating your credit score. The lender will be able to see when you missed payments and the type of credit that you missed the payment for. This Adverse Credit warning will influence their decision on whether they will lend to you. The more Adverse Credit instances you have, the less likely the lender is to let you borrow their money.

What can cause Adverse Credit:

  • Late payments
  • Missed payments
  • Defaults
  • CCJs (County Court Judgments)
  • IVAs
  • Being in a debt management program
  • Bankruptcy
  • Having a mortgage arrears.

If you have applied multiple times for finance and have been rejected, we recommend that you check your credit file before applying for finance again.

When you apply for car finance with Creditplus, we undertake what is known as a soft credit search, where we have a glimpse at your credit file rather than carry out a full search. This process is highly beneficial for someone with Adverse Credit. It allows us to understand the extent of the adversity on their credit file and we can advise of any lenders that may be able to help. By matching the customer with lenders that are likely to accept, we protect a customer's credit file from having any unnecessary full credit searches.

Find out more about the bad credit car loan options available to those with adverse credit.

Related Terms

Bad Credit
Credit Rating

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