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What Does Adverse Credit Mean? Quick Answer

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Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

Learn more about Scott
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Janine
Janine Marsh Profile Picture

Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Jan 13th, 2024
Could you legally write off some debt? Answer below to get started.

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For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

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Adverse Credit Mean

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

In this article, we’ll help you understand what adverse credit means. Adverse credit is a term that comes up when someone has missed repayments on credit cards or loans more than once. We know that this might make you worried about your future finances, but don’t fret; you’re not alone. Each month, over 170,000 people come to our site to get advice about money problems.

We’ll be explaining some key things. such as:

  • What does ‘adverse credit’ mean?
  • How long does adverse credit last?
  • How can you know if you have adverse credit?
  • How can you fix it?
  • How can it be removed from your credit report?

Our team understands your worries because some of us have had money troubles too. We know how it feels when things don’t go to plan. But together, we can find a way forward.

Let’s dive in and start sorting out these issues.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

What does adverse credit history mean?

Adverse credit history is another way of describing adverse credit, i.e. it is someone who has not met their credit repayment terms by not repaying lenders on time or the right amount for a prolonged duration. 

They may have missed multiple repayments on the same loan, or defaulted on a number of credit agreements simultaneously. The two terms are often used interchangeably.

How do I know if I have adverse credit?

You might have had loan arrears in the past and are now wondering how to check if you have an adverse credit history.

You can find out if you have adverse credit by completing a credit check on a credit reporting agency website. 

As lenders report defaults and negative balances to a credit agency, you’ll need to complete a credit check to find out. 

If you know you failed to pay what you borrowed in full or on time, it’s likely you will have bad credit

When the company reports your missed payments, your credit score will decrease by a considerable amount of points depending on the nature of the missed payment.

If you repeatedly miss payments, your credit score decreases more, and you will be left with an unsatisfactory credit rating

Some reporting will cause a bigger decrease in your credit score, such as bankruptcy

» TAKE ACTION NOW: Fill out the short debt form

Where can I find my credit report?

There are multiple online credit reference agencies registered in England, Wales and Scotland that you can use to access your credit report.

Some examples include Equifax, TransUnion, Experian and CallCredit. You may prefer to use another online agency. 

These agencies typically offer free trials where users can see their credit score and credit history for free for 30 days.

However, you must remember to cancel your free trial, or you could be made to pay for the following month(s). 

How do I fix my adverse credit?

The first way to possibly improve your credit score and any adverse credit history is to look for lender errors on your credit report.

Sometimes, a credit report will include erroneous details that lower your credit data. But you can ask lenders and agencies for these errors to be removed

You are usually asked to contact the lender first and ask them to request the error be removed. If they dispute the data held, you can ask the agency to look into the matter. 

Another way to “fix” adverse credit is to improve your current and ongoing financial health. By being responsible with money and repaying lenders as agreed, your score can increase, and the risk of lending credit to you will eventually decrease. 

Five common ways to do this are:

  1. Pay your bills on time and in full
  2. Avoid credit you don’t need
  3. Prioritise paying off debt (maybe those with high-interest rates first)
  4. Don’t move home too frequently
  5. Use limited credit responsibly

Some of these tasks are easier said than done. You might need the assistance of a budget planning tool, or even debt solutions.

A money management professional can help with the latter, but some equivalent services are available with debt charities like StepChange or National Debtline.

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get Started

How do I remove adverse credit from my credit report?

You can remove adverse credit from your credit report by looking for errors and asking for them to be removed by your lender from your credit history.

The only other way that adverse credit can be removed from your credit report is when they are automatically deleted after six years

But it’s just as important not to accumulate more arrears.

How long does adverse credit last?

Adverse credit history will remain on the individual’s credit file for six years in the UK.

After six years have elapsed since the late payments, the financial data is deleted from the credit score. 

However, there are ways to improve your credit file in the meantime, which could enable you to access credit from loans and credit card companies even with previous adverse credit. 

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

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I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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How to avoid adverse credit

A bad credit score begins with failing to keep up with credit agreements. This may be due to personal circumstances changing quickly, such as unemployment. Or it could be due to poor money management. 

In many cases, it’s not your fault at all; you may have been wrongfully given credit in the past or paid an illegal rate of interest (too high!). 

You can avoid late payments by asking lenders for breathing space or payment holidays when circumstances change.

They may be willing to renegotiate agreements to help you avoid negative account balances and thus, negative reporting. 

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

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The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.