Find out how to improve your adverse credit file with our simple advice

Whether you’ve been turned down for credit or looked up your credit score with a Credit Reference Agency, discovering you have adverse credit can be distressing. You may think that you will never be able to get you financial life back on track again but there are steps you can take to start to improve your credit health.

You won’t be able to repair your credit history instantly, but you can make changes that over time will help it recover over time. In the meantime, Simply Adverse can help you find a suitable mortgage, even with a poor credit history.

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What is adverse credit?

Adverse or poor credit refers to a record of poor management of previous credit agreements such as credit cards, loans or mortgage repayments. An indication of having adverse credit is being turned down for new credit products, or you may have requested a copy of your credit report from a Credit Reference Agency or other third-party body.

Whatever the reasons behind your adverse credit, once you’ve understood what they are, you can start to improve it.

Register to vote

Registering to vote will improve your chances of being able to access credit. This is because prospective lenders and credit reference agencies use the electoral register to check your identity, and your current address. This is also why you should double-check that you are registered at the correct address.

Registering to vote is simple, and if you’re worried about maintaining your privacy you can ask that your details be left off the ‘open register’, which is the register than can be seen by anyone. Opting out of the ‘open register’ means that your details will only be visible to restricted groups of people, such as lenders checking applications for credit.

Register to vote

Get up to date

Pay off any outstanding debts and make sure all your payments are up to date. Your payment history will have one of the biggest impacts on your credit history, so it pays to keep it in check.

Add your name to bills

If you live with a partner and only their name appears on utility bills etc, get yours added as well.

As long as these are being paid regularly and on time, payment of these bills will demonstrate to prospective lenders your credit worthiness. It doesn’t matter if payment comes out of your partner’s bank account, if your name is on the bill that will be reflected in your credit report.

Add your name to bills

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Check your financial associations

In the same way that having your name on a utility bill with a partner can have a positive impact on your credit history, being linked to someone who can’t meet their financial obligations can have a negative impact.

If you have had a financial relationship with another person over the past 6 years, their name will be linked to yours, even if you are no longer together. This is known as a financial association. Typically, this relationship will be a joint credit agreement, but you don’t need to have opened an account. An application may be enough to create a financial association.

Financial associations are shown on your credit report, but you can get them removed. If you no longer have a financial relationship with someone who appears on your credit report you can get it removed with a notice of disassociation, which tells lenders that you are no longer financially associated with each other.

Remove mistakes from your credit file

Mistakes on your credit report could give a distorted picture of your financial health. If you spot a mistake you can approach whoever produced your credit report to ask them to investigate and have the mistake removed. The process for this varies depending on who provided your credit report.

If whichever organisation provided the incorrect data agrees that it is indeed wrong, then it will be removed.

Remove mistakes
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Explain your adverse credit

If an organisation doesn’t agree that an entry is incorrect and/or you want to provide lenders with more information about the reasons behind your poor credit history, you can add a notice of correction.

This is a short statement that adds context for lenders and explains why your adverse credit occurs. This may be useful if you got into financial difficulties because of, for example redundancy or ill health. While the note of correction won’t change your ‘credit score’ it may make lenders more inclined to look favourably upon your application.

Use a credit card

It may seem counterintuitive to suggest using credit to improve your credit report, but well-maintained credit arrangements show lenders that you are able manage your financial commitments. Over time using a credit card responsibly will help to rebuild the health of your credit history.

Use a credit card

But don’t use too much of your credit

While using credit cards responsibly can help to improve your credit history it’s not a good idea to max them out. You should strike a balance, and don’t be tempted to use all the credit available to you. Over-extending yourself makes it more likely that you won’t be able to meet minimum payments or may miss payments all together.

Avoid making multiple applications

Each time you make an application for credit a ‘hard search’ is carried out. This will leave a mark on your credit report. Multiple applications, particularly over a short period of time, can negatively impact on your credit report so try and only apply for what you really need.

Don’t get caught again

Once you start to repair your credit history make sure you keep it fixed. Ensure that you don’t fall behind with any credit repayments and make sure that you pay all your bills on time. Setting up direct debits or standing orders to cover regular or minimum payments on credit products will help take the stress out of keeping your finances in shape.

Pay your bills on time
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Demonstrate that you can manage your current account

If you have adverse credit, mortgage lenders will take a particular interest in how you manage your current account.  

In short, lenders will want to see evidence that you will be able to cope with mortgage repayments. For example if you are living with parents, working full-time and have few essential outgoings, yet are running close to your overdraft limit every month there may be concerns about how financially responsible you are.

Lenders will also be sensitive to factors such as taking out short-term, ‘payday’ loans to cover expenses, as again this indicates that you may not be able to manage your money well. On the other hand a well-managed bank account can help mitigate some of the negative impressions created by a poor credit file.

When you talk to a Simply Adverse mortgage adviser, we don’t just look at your credit file. We’ll also take a detailed look your current account activity to help find the most suitable lender for you.

It’s not quick, but DON’T give up hope

There are no short cuts to improving your credit report. It takes time and commitment, and you may have to be prepared to make some personal sacrifices such as cutting back on your spending. In the real world though you may not be able to wait until your credit history has been repaired before you want to purchase a house.

Whether you need to move for work, because of a change in your domestic circumstances or just because you’ve found your dream home, at Simply Adverse we understand that you may want to apply for a mortgage with a less than perfect financial track record.

Speaking to our specialist adverse credit mortgage advisers can help you access a mortgage deal with a specialist adverse credit lender, so even if your credit history is still poor you won’t need to give up on your ambition to move to a new house or buy your first home. And remember, once you’ve got your mortgage, staying on top of repayments is a great way to start improving the health of your credit file.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Terms & Conditions

Fees vary according to individual circumstances and we will agree our fees with you before we undertake any chargeable work. This fee is for advice, research, recommendation, implementation (e.g. application, administration of arranging the loan). We will also be paid by commission from the lender.

Our typical broker fee is £1995. We typically charge up to 6% of the loan amount, dependent upon the severity of adverse credit and the lender being used. For example, on a loan of £100,000 we would charge up to £6000.

For second charge mortgage applications our typical broker fee is £1995. We typically charge up to 10% of the loan amount, dependent upon the severity of adverse credit and the lender being used. For example, on a loan of £40,000 we would charge up to £4000.

Our fee is payable upon receipt of your mortgage offer, we do not charge any upfront fee for identification of any potential solutions.

Legal Information

Simply Adverse is a trading style of Simply Investment Ltd. Simply Investment Limited is an Appointed Representative of Simply Lending Solutions Ltd who are authorised and regulated by the Financial Conduct Authority FSR Number 745164. 

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Simply Investment Ltd. Registered in England and Wales Company no: 06528590. Registered Office: Runwell Hall Farmhouse, Hoe Lane, Rettendon Common, Essex, England, CM3 8DQ.

Simply Adverse
15 Runwell Hall Farmhouse
Hoe Lane
Rettendon
Chelmsford
Essex
CM3 8DQ

Email: info@simplyadverse.co.uk
Tel: 01245 330163

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Disclaimer

All content on the Simply Adverse website is believed to be accurate at the time of publication. However, this is a fast-moving sector and lender criteria and policies change regularly. For this reason, we always recommend that you speak to one of our brokers for the most up to date information.

Articles can only ever provide general information and do not constitute financial advice. Our mortgage brokers are fully regulated by the Financial Conduct Authority, and it is only by speaking to them that you will receive advice and information tailored to your individual circumstances. Your home may be repossessed if you do not keep up with repayments on your mortgage.

You should always think carefully, and seek professional advice, before securing other debts against your home or releasing equity from your home.

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