Those with ‘adverse credit’ have something seriously nasty on their credit report, such as a default, or an arrangement to pay, an insolvency such as a bankruptcy or an IVA, or a mortgage repossession.
Lenders often have policy rules that say that will not lend to people with adverse credit. This is because it has been statistically proven that those with adverse credit are much more inclined to fall into arrears on credit agreements than others without adverse credit.
Some lenders specialise in lending to those with adverse credit. They are then said to be operating in the sub-prime lending market. Sub-prime lenders charge considerably more for credit to cover the additional costs of default, and of managing the accounts of those with adverse credit.
Most forms of adverse credit are removed from a credit report automatically after six years.
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