Pepper Money has revealed that 41% of adults who have experienced adverse credit in the last three years and are planning to purchase a house in the next 12 months with a mortgage or remortgage say they are planning to cut back on recreational activities to improve their credit rating before or during the application process.

This is according to research carried out by YouGov on behalf of the specialist lender. The research identified and questioned 600 people who have experienced credit problems, including missed payments, CCJs, defaults, unsecured arrears and secured arrears, in the last three years.

The research found that 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, while 32% say they will ensure all bills are paid on time, and 27% say they will reduce their mobile phone contract.

13% of people in this situation say they would consider entering a debt management plan (DMP).

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.”