Working together to tackle misconceptions

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The recent news of the CCJ that was registered to Prime Minister Boris Johnson at Number 10 Downing Street is evidence that credit blips can impact anyone in any walk of life.

The CCJ has now been removed, but the incident served as a reminder that there is still a stigma attached to an adverse credit record. There are not enough conversations about how this can impact someone’s finances and the available options.

To address this, Pepper Money has commissioned a series of studies into the objectives, opinions and goals of people who have experienced adverse credit.

It’s a sizeable group – 6.29 million people say that they have experienced some form of adverse credit in the last three years. It’s also a considerable opportunity for mortgage advisers, as more than 880,000 of these say that they are thinking about purchasing a property in the next 12 months.

However, to maximise the opportunity and help more potential customers with adverse credit to achieve their goals, there are several misconceptions that we need to address.

For example, the Study found that more than half of potential customers with adverse credit are concerned about their chances of getting a mortgage due to their credit record. While nearly a quarter incorrectly think they need to wait longer than five years to apply for a mortgage after being registered with a CCJ. The reality is many lenders can offer competitive mortgages to customers who have been registered with a CCJ as little as six months ago.

However, only 44% of respondents with adverse credit looking to buy a property said they would go to an adviser for help with their mortgage. Therefore, it is crucial that we promote to customers the opportunities they have to secure a mortgage, even if they have a record of adverse credit, and that the best way to access these opportunities is by speaking to a mortgage adviser.

At Pepper Money, we use financial inclusion as a guiding principle for our business. We strive to improve access to home ownership and secured lending for a diverse range of customers, including the self-employed, people who earn irregular incomes, first-time buyers, customers with little on their credit record and people who have a record of missed credit payments. We also understand that professional mortgage advice is key to increasing financial inclusion.

By opening a dialogue about people’s finances and credit issues, we can help tackle the stigma, increase awareness of the importance of professional advice, and help to drive more customers through your doors.

You can download your copy of the Pepper Money Adverse Credit Study – Spring 2021, and grow your knowledge of this large and often misunderstood area of the market.

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