A County Court Judgement, also known as a CCJ is an order issued by the County Court for a debtor to pay back money to creditor. A creditor will apply for a CCJ in an effort to reclaim this money back, having been unable to collect the funds through other means. CCJs are used throughout the UK in cases where borrowers of short term loans such as payday loans online and others, have been unable to repay the loan and have not been placed on a debt management or repayment plan.
It is important to understand what a CCJ actually is; what it will mean for you in practice and how it can affect your credit rating. By not addressing a CCJ and the underlying issues causing it to have occurred in the first place, you may be placing yourself in an unnecessarily difficult and precarious position.
It is always best to speak to your lender as soon as you realise you are having trouble repaying your loan. This allows the lender and the borrower to agree a mutually beneficial and affordable repayment plan so that as the borrower, you are able to clear your debts as soon as possible with regards to the money you will owe on a short term loan.
What Can I Do if I Receive a CCJ?
Although there is no single best way to address a CCJ, with everyone’s circumstances differing and therefore dictating slightly different subsequent actions, there a number of potential ways of dealing with a CCJ:
- You can choose to pay the creditor in full straight away. This will mean that the CCJ will not end up appearing on your credit file (which could otherwise impact your ability to get access to finance in the future)
- You could request to pay the amount back in instalments, based upon a mutual agreement with the creditor who issued the CCJ, for example as part of a debt management plan
- You can dispute the amount owed or the entire claim altogether, with the County Court making the final decision
The CCJ Register
Once a CCJ is issued, a debtor will have one month to repay the debt in full before the CCJ appears on the register and is recorded by credit reference agencies to appear on a debtor’s credit file.
Once a CCJ is recorded in a person’s credit file, it will remain on file for a period of six years. This could end up making it difficult to get approved for credit in the future, as lenders may doubt your ‘creditworthiness,’ having defaulted or been late to repay debts owed. Moreover, most direct lenders, i.e. the actual lender of the loan (not the broker you may apply though), will check the CCJ Register as part of their routine credit checks before funding a loan.
Can I Remove a CCJ From My Credit File?
Providing that you repay the full amount within a month, the CCJ will not appear on your credit file, although after this period of time it will be registered. There will however be a note indicating that you paid the amount back prior to a CCJ occurring. This is known as a ‘satisfied CCJ.’
Under certain circumstances, you may also be able to remove a CCJ from the register if you make an appeal to the court. However, this is a risky strategy as they do not necessarily get removed upon appeal and there is no guarantee your request will be granted at all by the courts.
If you ever receive a CCJ from any lender, for any type of loan or finance, you should act as quickly as possible to either dispute the claim, should you have a legitimate reason to do so or repay the debt as soon and as fully as possible. The long-term effect of having a CCJ on your credit file is extremely damaging and is a hindering factor when it comes to requiring and applying for future credit, even when it comes to things like getting a mobile phone or credit card.
Can I Repair My Credit File After Receiving a CCJ?
CCJs are something that lenders look out for instinctively when assessing an applicant’s credit file and credit history. One or more CCJs are therefore very damaging if you have any on your file. However, whilst it is not necessarily possible to ‘reverse’ a CCJ once it is on your file, there are a number of practices you can undertake to try and repair your credit rating, making you that little bit more appealing to future lenders:
- Register on the electoral register: If you are not already on the electoral register, registering yourself at your permanent UK address is appositive step as it confirms your place of abode to any future lenders
- Check your details – Obtain a copy of your credit report (this can be done for free with the likes of CallCredit and Experian) and check that your personal details are correct
- Consider credit repair – There are specific products and loans available in the UK such as credit repair and bad credit loans that are specifically designed for those with poor credit histories. However, use these carefully as missing repayments could further harm your credit record
- Minimise applications – For many products and loans, each time you make an application there is a record of prospective lenders’ subsequent checks each time they carry one out. Many closely recorded checks can indicate many rejections and this is looked down upon by many lenders and credit providers. Hence, by minimising applications you make, you can minimise the number of checks by lenders