"People who have experienced credit problems in the last three years have concerns about applying for a mortgage and are willing to make a number of sacrifices in order to buy a home."
The survey questioned 600 people who have experienced credit problems, including missed payments, CCJs, defaults, unsecured arrears and secured arrears, in the last three years.
A third (33%) of adults who have experienced adverse credit in the last three years say they will pay off their credit cards to improve the credit rating before applying for a mortgage. 32% say they will ensure all bills are paid on time and 27% say they will reduce their mobile phone contract.
More than 1 in 10 (13%) people in this situation say they would consider entering a debt management plan.
Paul Adams, sales director at Pepper Money, said: “It’s clear that many people who have experienced credit problems in the last three years have concerns about applying for a mortgage and are willing to make a number of sacrifices in order to buy a home. Cutting down on spending may have little impact on their credit score, however, and customers in these circumstances might be better off speaking to a broker about their options in the specialist mortgage market.
“A good specialist lender will use experienced underwriters to make its decisions, rather than a credit score, and will be able to look more closely into a customers’ circumstances to make an expert assessment on their ability to make payments on a mortgage in the future, even if they have experienced credit problems in the past.”
