Number of people with adverse credit on rise

January 30, 2026 by Mark

Borrowers

The latest research has found that the number of people in the UK with credit issues is on the rise, mainly due to ongoing spikes in living costs.

This is the finding of a new study by Pepper Money. It shows that over 16 million people have had problems that are affecting their credit histories. This amounts to one out of every three people in the country who now have adverse credit. Among the financial issues that they are facing are debt problems, County Court Judgements and arrears on credit cards.

This is the highest number of people to be in this situation for almost a decade. The key reason is the strain caused by the cost of living crisis. What the findings show is that this is leading to a sharp increase in credit problems.

Over half of the 16.6 million people who have adverse credit – 9.26 million to be exact – got into that situation during the past three years. Furthermore, it is not just people on low incomes who are being affected now. 49% of people with annual incomes of more than £100,000 are experiencing adverse credit.

Paul Adams is the sales director for Pepper Money. He said to Financial Reporter that:

“As adverse credit becomes more common, customers need more choice, not less. Together, brokers and specialist lenders can provide that choice and help people rebuild financial confidence, repair their credit, and continue their next step in homeownership.”

Most mortgage advisors with CeMAP training would like to see more adverse credit products from mainstream lenders too.