Adverse Credit

What is Adverse Credit?

Adverse Credit’ is a term used to describe a less-than-perfect record of repaying credit commitments. Those with ‘Adverse Credit’ will have negative payment information on their Credit Report, such as a default, or an arrangement to pay, an insolvency, or a mortgage repossession. The term can also refer to a series of late payments on a Credit Report.

Adverse Credit will affect your Credit Rating and as such your ability to take out finance. This information will remain on your Credit Report for six years from the date of account closure, after which time it will automatically be removed. This will continue to have a negative impact while it remains on your Credit Report, but it may become less significant the older it gets provided the rest of your Credit Report is clear of such negative information

Lenders often have policy rules that state that they will not lend to people with Adverse Credit. This is because it has been statistically proven that those customers are statistically much more inclined to fall into arrears on credit agreements than others without adverse credit.

As such, some lenders specialise in lending to those with Adverse Credit. They are then said to be operating in the sub-prime lending market. These lenders charge considerably more for credit to cover the additional costs of default, and of managing the accounts of those with Adverse Credit.


Q: How can I get adverse credit removed?

A: If the adverse information is accurate, you will be unable to get it removed from your Credit Report until it has been reported for six years, after which time it will be removed automatically.

Q: How will it affect my credit report?

A: On your Credit Report, Adverse Credit is denoted by negative payment status codes including 1,2,3,4,5,6,D and AR, and also by the presence of any judgment or insolvency, whether satisfied, discharged or not.

Potential lenders will be able to see your payment history when carrying out a credit check and if the impact of your negative payment history is severe enough, they may choose not to lend to you as a result.

Q: How can I check for adverse credit?

A: You can see adverse credit on your file by checking your credit report. checkmyfile’s Multi-Agency Credit Report lets you see information from 4 Credit Reference Agencies, not just 1, so you’ll be able to see any negative information on your file regardless of which agency is reporting it.

If you haven’t already, you can try checkmyfile FREE for 30 days, then for just £14.99 a month afterwards, which you can cancel online at any time.

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