Applying for a mortgage at the best of times can be difficult and stressful, so if you have a County Court Judgement (CCJ) against your name, it’s only natural to worry that this will make the process even more difficult.
While it’s true that having a CCJ can make getting a mortgage more tricky, it’s not impossible. We’ll explore what a CCJ is, how it can impact your ability to get a mortgage, and some options available to you if you have one.
- What Is a County Court Judgment (CCJ)?
- Can You Get a Mortgage With a CCJ?
- How Will a CCJ Affect My Credit Score?
- What Are The Best Mortgage Brokers For Bad Credit?
- What Should You Not Do When Getting a Mortgage?
- How Do I Know If I Have a CCJ?
- I Have a CCJ, What Can I Do?
- Can Lenders See a CCJ After six years?
- What Happens If I Get a CCJ and Don’t Pay?
- Does a CCJ Show On a DBS Check?
- Will a Satisfied CCJ Improve My Credit Score?
- What Is a High Court Judgment?
What Is a County Court Judgment (CCJ)?
A CCJ is issued against an individual who has failed to repay a debt. It is usually filed in court by an organisation such as a bank or loan company after they have tried unsuccessfully to recover their money by asking for voluntary repayment and sending reminders. The creditor must try this way – taking somebody to court immediately would be unlawful.
The CCJ is then submitted to the County Court, which, usually six weeks, which can vary depending on how busy they are, will issue the judgment against the debtor for either payment in full or settlement. You have 28 days to pay off or settle the debt before it goes onto your credit file.
A CCJ stays on your credit file for six years – however, most people do not realise that if you pay it off through an IVA, DMP or even just by paying the entire amount at once, they will automatically delete your old CCJs from your credit report. I know many people who have CCJs, especially students with overdrafts etc., who were told when they started applying for credit cards that their CCJ would not be a problem.
Can You Get a Mortgage With a CCJ?
A CCJ can seriously impact your mortgage application, as it will show up on your credit report and may make lenders reluctant to approve you for a loan.
However, getting a mortgage with a CCJ on your record is possible, though you may have to pay a higher interest rate or provide a larger down payment. Here are some things to keep in mind if you’re applying for a mortgage with a CCJ on your credit report:
1. The size of the CCJ will matter. A small CCJ is less likely to impact your mortgage application than a large one, so it may not be an issue if you have a very small CCJ.
2. How long ago the CCJ was issued will also be taken into account. If the CCJ is several years old and you have made all of your payments on time since then, it will be less of a concern to lenders than if it was issued more recently.
3. You may need to provide a larger down payment. If you have a CCJ on your record, lenders may require you to put down a larger down payment on the property in order to offset the risk they are taking by approving you for a loan.
4. You may need to pay a higher interest rate. Because you pose a higher risk to lenders, they may charge you a higher interest rate on your mortgage loan in order to compensate for that risk.
5. You will need to explain the circumstances surrounding the CCJ. When you apply for a mortgage, you will need to disclose the circumstances surrounding the CCJ on your application. Be prepared to explain what happened and why it won’t happen again in the future.
If you have a CCJ on your credit report, getting approved for a mortgage loan is still possible.
The thing is though, most people who have a CCJ already know about it, and in most cases, they will repay in full through an IVA or DMP. The only problem with this is that when you apply for a mortgage, the debt management company has to inform all three credit companies of your actions – i.e., they have repaid in full. When someone tells me this, I always ask them one question: How much did you pay?
How Will a CCJ Affect My Credit Score?
If you have a CCJ, it will be recorded on your credit file.
This means that it will show up on a credit check. This can make it more difficult to get approved for credit products, such as loans, credit cards, and mortgages.
Your credit score will also be affected by a CCJ.
A CCJ will stay on your credit file for six years, so it’s important to take action to improve your credit score as soon as possible. You can do this by ensuring you make all your payments on time and keeping your debt levels low.
What Happens If I Pay a CCJ In Full?
If you pay a CCJ in full within 30 days of the judgement being issued, it won’t be recorded on your credit file.
So if you have the opportunity to do this, you should pay it off in full.
Your credit score will still be affected by the loan or debt that led to the court action, but the CCJ itself won’t be recorded.
If you don’t pay the CCJ in full within 30 days, it will be recorded on your credit file and will remain there for six years. This will have a negative impact on your credit score and make it extremely difficult to get approved for a mortgage or credit.
What Are The Best Mortgage Brokers For Bad Credit?
If you have bad credit history or CCJ, it’s essential to speak to a mortgage broker who can help you find the best mortgage lender. Many mainstream lenders are unlikely to consider you for a mortgage application.
There are a few things you should look for when choosing a mortgage broker:
– Experience: Look for a mortgage broker who has experience helping people with bad credit. They will know which lenders are more likely to approve your application and what type of products would be best for you.
– Flexibility: Some mortgage brokers are more flexible than others. Look for a broker who is willing to work with you to find a solution that fits your needs and budget.
– Transparency: Make sure that the mortgage broker is upfront about all of the fees and charges associated with the loan. You should also ask about the mortgage broker’s success rate in helping people with bad credit.
– Customer service: Choose a mortgage broker who is easy to communicate with and who you feel comfortable working with. You should be able to ask them any questions you have about the loan process.
Finding the right mortgage broker is crucial if you want to get approved for a mortgage with bad credit. Make sure to research and choose a broker you feel confident working with.
Our Top 3 Bad Credit Mortgages
We have chosen 3 of the best bad credit CCJ mortgages that will assist you in finding potential lenders based on your financial circumstances.
What Should You Not Do When Getting a Mortgage?
There are a few things you should avoid doing when you’re applying for a mortgage while having a CCJ against you. Ensuring you do this gives you the best chance of obtaining a mortgage on a house. We will not lie to you, it’s very difficult, close to impossible.
– Don’t make any significant financial changes. This includes changing jobs, increasing your debt, or taking out any new credit products.
– Don’t open any new lines of credit. This includes credit cards, loans, and other forms of borrowing.
– Don’t close any existing lines of credit. This can negatively impact your credit score.
– Don’t move house. Lenders will want to see that you have a stable address history.
– Don’t make any large purchases. This could increase your debt-to-income ratio and make it harder to qualify for a mortgage.
If you’re thinking of buying a home, it’s important to start planning early and understand the mortgage application process. Speak to a mortgage broker to determine how much you could borrow and compare different mortgage products. It’s also a good idea to check your credit report to see if any negative items could impact your application.
How Do I Know If I Have a CCJ?
If you have been served with a CCJ, it will be recorded on your credit file. You can check your credit history to see if you have any CCJs against your name.
You can also check the court records to see if there are any CCJs issued against you. However, this can be a more complex process as you’ll need to know which court issued the CCJ and the case number.
If you’re not sure whether you have a CCJ, you can get a copy of your credit report from one of the leading credit reference agencies, such as Experian or Equifax. This will show any CCJs against your name.
I Have a CCJ, What Can I Do?
If you have a CCJ, it’s important to take action immediately. If you don’t pay, the creditor can take further action to recover the debt, which could include applying for an enforcement order from the court, which would allow them to take possessions from your home or seize your wages.
If you’re struggling to repay a CCJ, getting advice from a debt adviser is important. They can help you negotiate with your creditors and come up with a repayment plan that’s affordable for you. You should also check your credit file regularly to make sure that the CCJ is being removed after six years.
Can Lenders See a CCJ After six years?
People who have had County Court Judgments issued against them usually worry that they will show up on credit reports for six years. This is not always the case; in most cases, these do not need to be disclosed to lenders if they were taken out more than 6 yrs ago (in England & Wales) and are settled/forgiven.
If they are still active (i.e., you haven’t paid), then yes, a lender would see them when looking at your history – this is because although the creditor may have written them off, it doesn’t mean that someone else can’t take one out against you for precisely the same reasons. It should also be noted that CCJs only stay on a credit file for six years, no matter their stage (0, 1 or 2).
What Happens If I Get a CCJ and Don’t Pay?
If you’re served with a CCJ, taking action immediately is important. If you don’t pay, the creditor can take further action to recover the debt, which could include:
– Applying for an enforcement order from the court, which would allow them to take possessions from your home or seize your wages
– Applying for a charging order, which would put a charge on your property
– Applying for an attachment of earnings order, which would deduct money from your wages to repay the debt
The creditor can also ask the court to issue a warrant of execution, which would allow bailiffs to seize your possessions. If you don’t take action to repay the debt, the creditor may eventually take you to court to bankrupt you.
If you’re struggling to repay a CCJ, getting advice from a debt adviser is important. They can help you negotiate with your creditors and come up with a repayment plan that’s affordable for you.
Does a CCJ Show On a DBS Check?
A CCJ is not a criminal offence and, therefore, won’t show up on a DBS check.
However, it will show up on a credit check. This means that if an employer runs a credit check on you, they’ll be able to see that you have a CCJ. Not all employers will run a credit check, but some may do so, particularly if the role you’re applying for is financially responsible. If you have a CCJ, it’s important, to be honest with potential employers about it. You should also explain what action you’ve taken to repay the debt.
Is Not Paying a CCJ a Criminal Offence?
No, not paying a CCJ is not a criminal offence.
However, if you don’t take action to repay the debt, the creditor may eventually take you to court to bankrupt you. This serious financial consequence can have a major impact on your life, so it’s important to get advice from a debt adviser if you’re struggling to repay a CCJ.
Will a Satisfied CCJ Improve My Credit Score?
It will improve slightly, but the damage has been done. It will take time and effort to improve your credit score after a CCJ. You can do this by ensuring you make all your payments on time and keeping your debt levels low.
It would help if you got advice from a debt adviser to help you repay any outstanding debts, this can be done through Step Change or by making contact with Citizens Advice. They will be able to arrange a debt management plan.
What Is a High Court Judgment?
A High Court Judgment (HCJ) is basically the same as a County Court Judgment (CCJ). However, they’re both different to default judgments and bankruptcy orders.
All three of these will appear on your credit file whether it’s for six years or forever – most creditors list defaults as 7 yrs, and bankruptcies stay on for 12 years after the order was made.
The only difference between a CCJ and HCJ is how they were created; a CCJ can be made if you don’t meet your financial responsibilities, e.g., you renege on the agreement and don’t pay back, and an HCJ is made after a judge has said you don’t meet your responsibilities and therefore they have had to make it for you.
Most HCJs are awarded as a result of a small claims court action, so they are usually for smaller debts, e.g., these can be up to £5000, but under the consumer credit act, when a creditor isn’t able to recover the debt from you, they can make an application for a court order which forces your wages to be deducted at source (usually about 25%) and paid back to them.