Adverse credit searches up by more than 90% in 2023

Searches for customers with adverse credit increased by 90.7% year-on-year in 2023, according to data from Twenty7tec

The data was released for a co-branded version of the Pepper Money Specialist Lending Study.

Twenty7tec partnered with Pepper Money to provide analysis of broker activity on the sourcing platform alongside the customer insights that were recently revealed in the specialist lender’s landmark research study.

As well as a significant increase in the number of searches, adverse credit criteria accounted for 26.77% of the top criteria in 2023, slightly up from the previous year.

The most popular adverse credit criteria searches were for satisfied defaults, missed credit payments, and satisfied CCJs.

According to the Specialist Lending Study, the main reasons customers had adverse credit on their profile were missed credit payments, defaults and Debt Management Plans.

Nakita Moss, team manager for lender relationships at Twenty7tec, said: “2023 was our busiest ever year for mortgage searches.

“By mid-November, we’d already surpassed 2022’s record figures and then had our busiest ever December on top of that.”

Moss added: “The increase in mortgage searches can be largely attributed to heightened uncertainty surrounding interest rates.

“It doesn’t necessarily translate directly into increased house purchases or remortgage, but rather, it reflects the frequent base rate changes we saw last year, lenders making necessary adjustments to their rates and product attributes, and advisers staying informed to ensure they recommend the most suitable options for their customers.

“In 2023, we saw a notable surge of 90.7% rise in the actual number of adverse credit criteria searches, marking it as the predominant criteria selections used by advisers on our platform.

“That said, there was a significant increase overall in the utilisation of our criteria tool alongside product searches via Twenty7tec in 2023 as more and more advisers used our advanced technology.”

Rob Barnard, director of intermediary relationships at Pepper Money, said: “More than a quarter of the adult population in the UK have some history of adverse credit.

“Missed credit payments are no longer isolated incidents. They are part of the norm, and we need to normalise the conversation about the options for those people with adverse credit when it comes to getting a mortgage.”

Want to know more about the complex credit market? Read this month’s feature in The Intermediary, digital issues of which can be found here.