The interesting case of the historical student credit card


  • First time buyers, Katie and Phil wanted to buy their first home with a 20% deposit thanks to an inheritance

  • Katie had a historical adverse credit record due to missed payments as a student resulting in a credit score fail

  • Despite both having sufficient income to cover their mortgage repayments, their application was declined by mainstream lenders

  • Our individual approach meant that Katie and Phil were able to go ahead and buy their first home


Katie and Phil had lived in rented accommodation since graduating from university. At a time when interest rates were at their lowest point in living memory, they decided now was a good time to buy their first home together and commit to a mortgage.

They both had good incomes and worked out that they could easily afford a mortgage. They'd saved a 5% deposit and Phil had received an inheritance which boosted their deposit to 20%, making their decision to buy easier. 

The issues

However, after being declined by a high street lender, Katie found that she'd had an adverse credit record due to missed credit card payments as a student. 

Despite her debts being paid off, the missed payments remained on her credit record for several years.

They went to mortgage adviser, Richard Jenkins, at Bespoke Independent Financial Advisers for help.


Richard Jenkins, mortgage adviser at Bespoke Independent Financial Advisers, says:

"It's easy to let finances temporarily veer off track, especially as a student, but a short-term issue can leave a legacy that takes longer to shake off than most people realise. 

Pepper Money's individual approach to assessing mortgage applications rather than using credit scoring meant that Katie and Phil's application was given the go-ahead and they could buy their first home together."

The solution

Richard realised this was a case for a specialist lender and so approached us. 

He explains: "Pepper Money doesn't use credit scoring and instead a skilled underwriter assesses each case on its own merits. This is a lot better for this type of application, as they could quickly establish that my client's adverse credit history resulted from her time as a student.

They could also see that Katie and Phil's income was more than sufficient to service the loan which, when combined with their 20% deposit, made this a strong application."


This case study is based on criteria in effect at the time this case was submitted and reviewed by Pepper Money. We reserve the right to change or amend our criteria at any time. All our stories are based on real cases but the names have been changed.


You may also be interested in

The teacher and the lost payments

Teacher Jemma Davies, originally bought her house in 1990 jointly with her husband, mother, and her mother's partner. But, due to an administrative error, she was finding it hard to remortgage.

Case Study
Alt - The teacher and the lost payments