The number of people with bad credit histories (also known as adverse credit histories) has increased significantly in recent years. This is due to several factors.
1. Increased choice of financial products available for sale.
There are numerous products and opportunities for borrowing money. With increased choice of borrowing options, it is not surprising that more people have missed the odd payment.
2. Increased propensity to borrow.
The last decade has seen record levels of consumer borrowing. The level of consumer borrowing has risen for various reasons, some cultural and some financial.
- Lower interest rates.- A period of low inflation and low interest rates has made borrowing seem more secure than in previous decades.
- Rising House Prices. – Rising consumer wealth has given consumers more confidence to borrow more money and take out other loans backed against the value of their house.
- Increased willingness to go into debt. Generally, consumers have become more willing to borrow and go into debt. This reflects changing attitudes to money and spending.
- Long Period of economic stability. Since the end of the last recession in 1992, the economy has experienced a long period of unbroken economic expansion. This has encouraged people to borrow and therefore the number of people with people who borrow has increased.