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.
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.
The reasons that someone can have adverse credit vary, but will often be issues such as missed payments, defaults, CCJs, as well as other financial and circumstantial factors. 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.
For example, adverse credit could be a result of missing a loan payment. When you miss a payment, the lender will advise the credit bureau (also known as the Credit Reference Agency), who will add this to the credit file 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 when calculating your credit score. The lender will be able to see when you missed payments, as well as the type of credit you missed the payment for. The more adverse credit instances you have, the less likely the lender is to let you borrow money.
Additional causes of adverse credit:
For more causes in more detail click here.
If you have had any repayment issues in the past or 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. 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.
For any other information to help you understand credit scores, please visit our Credit Clinic.
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, so 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.
This data has been put together with help from the Creditplus Customer Advisors.
If you require further assistance, our team of Customer Advisors are here to help. We're open six days a week - you can view our opening hours here - and we're more than happy to answer your questions.