On average, more than 100,000 people are declared bankrupt every year, and almost 25,000 of these cases lead to the repossession of their homes.
People say that these numbers are because people don't take care of their money well, and they point a firm finger at the way the British spend their money, especially on non-essential items. This adds up to a staggering GBP169 billion in spending, while the number of people with bad credit keeps going up.
Once a person starts to build up debt, it can hurt their credit score, making it harder for them to get loans, mortgages, finance deals, or credit card applications approved. Those who do "slip through the net" can expect to pay much higher interest rates than their neighbours who are not in debt.
For people who have been declared bankrupt or unable to pay their bills, getting back on their feet and getting a good credit score can seem like a long and hard road. It might look like there's no way out.
But many of the people who have been hurt in this way are learning that they can solve their financial problems by using the equity they already have in their homes.
There are now more mortgage lenders who focus on helping people with bad credit get mortgages and remortgages. By working out good repayment terms with these lenders, payments can be made regularly and affordably, which can start to improve these credit scores and, with careful money management, can even turn a bad score into a good one.
By talking to a specialist mortgage broker, of which there are many in the UK, it may be possible to find a lender who will work with the consumer's situation. Some lenders even offer "repayment holidays" for a certain amount of time, which allows the consumer to pay off other debts faster and erases their history of bad credit.
