Adverse credit refers to a credit history that includes missed payments, defaults, County Court Judgements (CCJs), an Individual Voluntary Arrangement (IVA) or bankruptcy. Lenders use it to assess risk.
How long does it affect you?
- Late payments and missed payments: 6 years on your credit file
- CCJs: 6 years from the date of judgement (removed if satisfied within 1 month)
- IVA: 6 years from the start date
- Bankruptcy: 6 years from discharge
Getting a mortgage with adverse credit
Specialist adverse credit mortgage lenders exist, but they charge higher rates. The more time that has passed since the adverse credit event, the better your options become. A whole-of-market broker with adverse credit experience is essential.
Rebuilding credit
Register to vote. Open a credit card with a small limit, use it monthly for a small purchase, and pay it in full. Don't apply for multiple products at once. After 12–18 months of clean conduct, your score will improve noticeably.