A single missed credit payment is the most common way for a borrower to be marked as having an adverse credit record, according to research from Pepper Money.

Almost three quarters, or 73%, of borrowers end up with a poor credit record through “a simple missed credit payment”, says the specialist lender in its Adverse Credit Study released today.

It adds the second most common reason for a poor credit record is missing several credit payments, resulting in a default, which has been experienced by 35% of adults with adverse credit.

The report says 27% of people with below par credit records have entered into a debt management plan, and 26% have unsecured arrears.

Just over one in five people with adverse credit, or 22%, have had a county court judgement against them in the last three years, which increased from 18% since the research was last carried out in autumn 2020.

The least common reason for adverse credit is secured arrears, a loan taken out against an asset, which has been experienced by 18% of people with adverse credit.

The report says: “Just over half (52%) of adults with adverse credit who are planning to purchase a property in the next 12 months say they are concerned about their mortgage application being declined due to their credit history.”

The study was conducted in March when the UK was still under strict lockdown, but the vaccination programme provided a roadmap back to recovery.

It adds: “There’s a definite trend for the pandemic having a more significant financial impact on those customers with adverse credit and we must ensure that this doesn’t lead to those customers being disenfranchised from financial products in the future.”

Pepper Money sales director Paul Adams says: “There are well over 6 million people in this country who have some sort of adverse credit on their file from the last three years.

“Often it’s simply the result of a missed credit payment, or multiple missed payments. Over two million people have received a Default, and nearly 1.4 million people have received a CCJ – including, of course, Boris Johnson, according to recent reports.

“The ways in which people can get an adverse credit record and the circumstances that lead to it are diverse, but the unifying factor for all of these customers is that there are mortgage lenders able to make sensible decisions based on their individual circumstances and provide opportunities to borrow the money they need to meet their goals.”

Data group YouGov conducted an online survey for Pepper Money in March that included a nationally representative sample of 4,242 adults.