The situation right now for those with adverse credit is complicated, because risk has become the most important issue for mortgage lenders. Where once they were concentrating on volumes and getting as many borrowers as possible, now they only want good borrowers. This is most relevant in the case of high street banks: they simply will not accept people with adverse credit. If you have had debt problems in the past or currently have debt problems, high street banks will not be able to help. The likes of Halifax, Barclays and especially Northern Rock lost heavily in the credit crunch so simply now do not have the money to lend, especially to those with adverse credit.
Building societies are the same – your local branch that you may have saved with for years is doing all it can to avoid risk. They are smaller institutions and need to make sure their members’ monies are safe during this time of rate changes, market drops and redundancies, which means adverse credit is a no-go area for them too. If you have adverse credit it may seem like no one wants to offer you any sort of finance.
So where does this leave you? You could just stick with your debts and your current mortgage, pay higher standard variable rates and keep trying to struggle with debts and adverse credit. Some people are resigned to that situation and it will be tough. Some may even lose their homes as a result of bad debts. But not everybody. Some people will be able to find finance with adverse credit and will be able to live another day.
The key is advice. Financial advisers are the only people who will be able to search out lenders who will still take on people with some adverse credit. If you have lots of problems, no equity and little income then it may be difficult to help you at all, but if you have minor problems, small debts and a steady income then your adverse credit may not stand in your way.
For some, things are only going to get worse. As time goes on, and more financial institutions crumble, adverse credit will be a bigger hurdle for borrowers. But for some who are willing to work harder and pay a little more, adverse credit can become a thing of the past. So if you think you can beat the crunch, talk to an adviser today.