More than four in 10 adults plan to cut back on recreational activities to improve their credit rating in order to buy a home, YouGov research on behalf of specialist lender Pepper Money has found.
Some 41% of people who have experienced adverse credit in the past three years and are planning to purchase a house in the next 12 months with a mortgage or remortgage said they are planning to cut back on recreational activities.
This to improve their credit rating before or during the application process.
Paul Adams (pictured) sales director at Pepper Money, said: “It’s clear that many people who have experienced credit problems in the last three years have concerns about applying for a mortgage and are willing to make a number of sacrifices in order to buy a home.
“Cutting down on spending may have little impact on their credit score, however, and customers in these circumstances might be better off speaking to a broker about their options in the specialist mortgage market.
“A good specialist lender will use experienced underwriters to make its decisions, rather than a credit score, and will be able to look more closely into a customers’ circumstances to make an expert assessment on their ability to make payments on a mortgage in the future, even if they have experienced credit problems in the past.”
A third (33%) of adults who have experienced adverse credit in the past three years, said they will pay off their credit cards to improve the credit rating before applying for a mortgage.
Meanwhile 32% said they will ensure all bills are paid on time, and 27% will reduce their mobile phone contract.
More than one in 10 (13%) people in this situation reported they would consider entering a debt management plan (DMP).