Head of Mortgages and Insurance Stephanie Charman takes a look at clients with adverse history and what advisers can do to help them

There are many reasons why a client may have an adverse credit history and may need to consider a more complicated borrowing scenario. Knowing who you can turn to help your client in these circumstances is very important and we want to help you find the right solutions for your client wherever we can.

Why might clients with adverse credit need helping?

Someone with adverse credit will most likely have something on their credit history that could mean a regular high street lender will not want to lend to them. A low credit score can be detrimental when looking to borrow. This can be caused by something as simple as not being on the electoral roll, missing a bill payment or not having an established credit history, which is why helping your clients get ‘mortgage ready’ is really important.

Recent adverse is much more damaging to the client’s credit score as most lenders consider any adverse which is over six years old. Your client may also need to remortgage to consolidate existing credit, which may help them with their credit score in the long term but should be considered alongside other potential options. Bad credit also affects both parties if your client was named on an agreement that has caused adverse credit history, regardless of which party has caused the issue.

Who and what can help clients with an adverse credit history?

As we all know, bad credit can be repaired. This can normally take two or three years, depending on the severity of the adverse credit, and some clients may have already attempted to repair their credit using credit cards, small loan, or a finance arrangement.

Some specialist lenders do not even use credit scoring on prospective borrowers, although they will still examine a client’s file. Some lenders that do this are Magellan Homeloans, Precise Mortgages, Kensington Mortgages and Aldermore. Some other main lenders will also look at mild adverse but still credit score. Positive Lending can also be used for second charges and on some adverse borrowing needs.

BTL lending is really tough on those with adverse credit, especially when the credit is caused through previous arrears, defaults, missed payments or CCJs. In this case, Precise Mortgages may consider the client under some circumstances.

If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.