County Court Judgement (CCJ) will be reflected on your credit report for almost six years from the date of the judgement. Now, if you pay the pending amount within 1 month, you can get CCJs removed from your credit file.
However, borrowing becomes tough in this situation. Even if you get an opportunity to borrow, you might have to accept high rates of interest. Find out the conditions you must fulfil to get CCJ loans and more about this borrowing venture.
Understanding CCJs and their impact on loan approval
County Court Judgements have been issued as a court order in England, Wales, etc. When anyone fails to pay back debts, the creditor has the right to take legal action. Its impact on your borrowing options:
- You can access limited options from within 0 to 12 months
- Specialist lenders might accept your application within 1 to 3 years
- You can enjoy more flexibility within 3 to 6 years
- After 6 years, CCJ will no longer impact your credit report
Once this has been issued, that person will legally own the debt. Later, it has been set out how the pending dues are going to be covered. What does CCJ indicate? Here they are:
- You have been missing payments for a long duration
- The issue has now moved to the court
- You were unable to settle the issue before legal action was taken
What lenders will assess before offering loans with CCJs?
The age of CCJ: If it has been a recent CCJ, this will have a negative impression.
The CCJ value: If the value is greater, this means more risk to the lender.
Status of CCJ: The lender will figure out if it has been paid or unpaid.
Number of CCJs: The total number of times CCJ has appeared in your credit file.
Additionally, your total credit behaviour before and after CCJ will matter the most.
Can I get a loan with a CCJ in the UK?
Yes, you can get a loan in the UK, as the extent of the issue will determine the amount of resistance you will have to face. Review what you can do to improve your eligibility in order to get access to a loan.
Do CCJs automatically means loan rejection?
No, this is indeed a disadvantageous condition, but this does not mean you cannot get approval for loans. All you need is to look for the right type of lender and loan product.
A rejection might happen because of automated system-generated rejections. You might get stuck during affordability checks. There are multiple ongoing credit issues going on to amplify the risk.
What are CCJ loans?
This financing option lets you borrow money when almost all the doors are closed for you. They are specialised loan products designed to help someone dealing with one or more County Court Judgement issues.
Which loan options accept applicants with CCJs?
There are common loan options you can expect to get when you are facing a tough time because of a terrible credit score.
Loans with a guarantor
Since you are in a dangerous financial state, getting loans without any solid assurance for repayment is impossible. However, you can apply for guarantor loans, which allow you to produce someone who can support repayments on your behalf.
That person should have a steady financial condition with stellar credit scores. They should be earning money from direct employment.
Secured loans
They are one form of personal loans where you must provide an asset to get loan assistance. Here, collateral pledged by you will let the lender recover the loan amount if you fail to pay back loans on time.
You must produce proof of ownership to convince the lender. If you cannot make it to repay loans within the given time, you will have to bid adieu to your assets forever.
Loans for home improvement
When you are applying for home improvement loans, you can use your home as an asset. Here, again, your CCJ cannot become a reason for loan rejection. This is because you will be using your home to get the desired amount for its refurbishment.
Specialised loans for bad credit
Here, if you want, you can take the help of a broker to spot lenders who can offer bad credit loans. It is true that you are going to be a high-risk borrower for the lender.
Thus, you need to filter your options precisely. The number of opportunities will be limited, and you should be prepared to face higher APR rates.
What are the conditions you must fulfil to get a loan with CCJ?
There are a few typical as well as major conditions you must fulfil to be considered for these loans.
- Show your payslips or bank statements to allow the lender to review your income
- Undergo an affordability assessment, which is the basic and can make or break this opportunity
- The lender must get the signs of improvement from your end
- Provide proof of ID and UK residency
- Make sure about the number of existing and fresh credit issues
- A guarantor of security can extensively increase the chances of approval
Some of the conditions might vary from lender to lender. Thus, understand the requirements of the loan provider before finally applying for these loans.
How to get finance with a CCJ?
Here is the step-by-step guide to getting a CCJ loan in the UK. The process might feel overwhelming, but you should not give up, as getting loans is still possible. This has been established to you already.
Prevent yourself from rushing to get any random option. Go through these steps to get loan assistance during this difficult situation.
- Review your credit file: This step is crucial to understanding how deep your problem is and points out errors causing terrible credit scores.
- Unveil the status: This is to understand whether you can pay CCJ now, or if it has remained unpaid.
- Assess your financial condition: The status of your income, expenses and debts should be assessed to understand the likelihood of getting loan payments.
- Decide the type of CCJ loan: You must find out the type of loan suitable for your current situation and requirements.
- Gather documents: While applying for loans, you must produce a few important documents. Get ready with them.
- Submit an application: You need to fill out an online application. It will require you to enter some details correctly so that the lender can process your application.
- Face a few checks: Go through the checks that the lender will conduct to assess your financial stability.
- Receive a loan offer: You can pre-qualify to get a loan offer that will include interest rates, total repayment amount, and monthly instalments.
- Sign and accept: If the terms and conditions seem suitable for you, accept them by signing the loan agreement.
- Receive funds: Finally, the loan amount will be transferred online to your checking account.
The bottom line
A CCJ is definitely a bad blot on your credit report. It does not have to block all borrowing opportunities for you. Sailing through this situation is possible, and you will need to follow a structured approach.
Remember the pointers that can help you get closer to getting financial help despite poor credit.
Sarah Jones is a seasoned financial writer with over a decade of experience covering personal finance loans, and dedicated to provide the best lending solutions to the clients. Known for translating complex financial topics into accessible insights, Sarah contributes to leading loan providers like Arbitrageloans and contributes to the company’s growth via professional writing and loan guidance. She holds a degree in economics and is passionate about helping aspirants with tools to make informed loan decisions. She also loves to explore the world and its natural beauty. Sarah believes financial literacy is the base of legitimate lending and borrowing. She strives to make it understandable for all.
