Credit Rating Issues – Adverse Credit

Understanding Adverse Credit

Adverse credit can be split into 6 categories.

• Secured debt arrears – This covers mortgages or other secured loans whose monthly repayments are not being met.
• Unsecured debt arrears – This covers bank loans, credit cards or hire purchase arrangements that aren’t being met each month.
• CCJ (County Court Judgement) – is a judgement that a county court issues when someone has failed to pay money they owe. CCJs are a simple way for creditors to claim the money they are entitled to. Whether its an individual, company or organisation.
• Defaults – When a lender stops a loan as it is in arrears and demands a full settlement. Customers are taken to court if no settlement is forthcoming.
• IVA (Individual Voluntary Arrangement) – When an individual is struggling with unsecured debt.  An insolvency agency  will work out how to reduce the debt and how much an individual can afford to repay each month, so that debts are repaid in part. At the end of the term, any unpaid debt is written off. This is different to bankruptcy which puts a persons home at risk.
• Any adverse credit connected to a corporate body. For example, an individual who has been a Director/partner in a company that has gone into liquidation.