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Those with bad credit hit hardest by Covid

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The financial fallout of the global pandemic has been felt more sharply by those who already had a history of adverse credit
Those with bad credit hit hardest by Covid

Customers with adverse credit have been most negatively impacted by COVID-19, according to Pepper Money.

The specialist lender looked at how the pandemic has affected the finances of those with and without adverse credit.

It found that more than a third (37%) of people with adverse credit say their income had decreased as a direct result of COVID-19, compared to only a quarter (25%) of people overall.

Of those with adverse credit 35% say the amount of debt they have has increased as a direct result of COVID-19, compared to 25% of people overall.

Barrier to a mortgage

Seven in 10 people with adverse credit think the economic downturn as a result of COVID-19 will make it harder to get a mortgage in the future.

Paul Adams, sales director at Pepper Money, said: “People with a clean credit file are more likely to have emerged from COVID-19 in a stronger position financially, whilst those who have experienced adverse credit in the last three years are more likely to have suffered a fall in income and seen their debt levels increase.

“It is more important than ever that we ensure these people are not disenfranchised from mortgage lending because of their credit history, but that they are given a fair opportunity to access the market based on their current circumstances and future ability to make payments.

“Professional advice is the key to achieving this and brokers have an important role to play in helping people realise their objectives and repair their finances as we emerge from the pandemic.”

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