Research for Pepper Money has found that customers with adverse credit are more positive about their prospects for a successful mortgage application than they were six months ago.

As part of its latest Adverse Credit Study carried out in association with YouGov, the specialist lender found that 52% of adults with adverse credit, who are looking to purchase a property in the next 12 months, are concerned about having their mortgage application declined due to their credit history.

This has decreased from last autumn when over two thirds of people with adverse credit and looking to buy a property were concerned (69%) about having their mortgage application declined.

However, the most recent Adverse Credit Study found that only 6% of homeowners who had experienced adverse credit before buying their current property say their adverse credit resulted in a declined mortgage application.

Pepper Money says this misconception about the impact of adverse credit on the ability to successfully apply for a mortgage is demonstrated by incorrect assumptions to the impact a CCJ can have on their mortgage prospects.

While 75% of people with adverse credit say they know what a County Court Judgement is, 23% of people surveyed think they would have to wait longer than five years to apply for a mortgage after being registered with a CCJ. The reality is that many lenders are able to offer competitive mortgages to customers who have been registered with a CCJ as little as six months ago.

Paul Adams, sales director at Pepper Money, said: “This research is a mix of good news and bad news. It’s great that customers with adverse credit are generally more positive about their chances of getting a mortgage. There is, however, still a significant perception gap and areas of misunderstanding about the opportunities that are available for customers with more complex circumstances.

“The good news is that this presents an opportunity for mortgage brokers to help raise awareness and understanding about the options available, and this can help them to reach more customers and build trust.”