What is a County Court Judgment (CCJ)?
A County Court Judgement is issued if you fail to pay money that you owe and most other reasonable avenues to recover the money - letters, defaults, late payment notices - have been ignored and exhausted.
A CCJ can have serious repercussions for your mortgage chances. Many mainstream lenders refuse to give mortgages to people with an open CCJ, or ones that have occurred in the past three years.
A satisfied court judgment - one which has been paid off, solved or settled - is looked on more favourably. A settled CCJ disappears from your credit file after six years, and there are plenty of lenders willing to take you on if this is the case.
This guide explains how a CCJ affects your mortgage chances and how to get on the property ladder if you have this kind of bad credit.
Can I still get a mortgage if I have a CCJ?
If you paid the debt relating to the CCJ within 30 days or successfully disputed it, it might not even appear on your credit history at all, though the accompanying defaults or actions leading to the CCJ may well do (unless the claim was proven to be false.)
If you failed to pay within 30 days, things become tougher, but there are options open to you. The more recent and expensive the CCJ, the smaller the pool of lenders willing to give you a mortgage is.
A CCJ is rarely given in isolation, and they often accompany other credit problems stopping you from getting a mortgage.
A lender might move past the CCJ only to be pushed back by something else. Were there issues involving money owed to a mortgage provider? Did it involve property? Was the CCJ brought because you badly managed your finances over an extended period?
But having a regular proven income, a clear credit history since the CCJ and the CCJ being settled or paid off gives you more of a chance.
There are a growing number of lenders who cater for applicants with CCJs, but the most important factor is how long ago the CCJ was.
A mortgage broker will be essential to helping you find the right deal if you've had a CCJ.
- Find out more: choosing a mortgage broker
Does the date of my CCJ matter for a mortgage?
Yes. If your CCJ was longer than six years ago it will not appear on your credit file. It is simpler to get a mortgage if your CCJ was more than three years old compared to one within the past year.
Some lenders look at CCJs differently. One lender might look at only when the CCJ was issued others will focus on when it was settled or if it was settled at all.
I had a 'judgment in default'. Can I still get a mortgage?
A 'judgment in default' is where you've been sent a CCJ notice but failed to respond to the claim or attend the hearing. The court then enters its own judgment - without evidence - and you have to adhere to the judgment and payment plan it decides.
Any failure to do this may trigger further punishment, such as bailiffs, goods seizure or even an 'earnings order', where the money is deducted directly from your pay.
Your credit report needs to be as clean as possible besides the CCJ default.
Can I get a CCJ removed from my credit file?
Yes, but you need to prove it was paid within 30 days of being issued; it’s been six years since you received the CCJ; you successfully disputed the CCJ or another party was proven responsible for it (i.e. an insurance company subsequently covered it.)
If you never received the CCJ in the first place and it appeared on your file, you need to contact the court where the CCJ was made.
You should also contact each of the three credit reference agencies and get a 'notice of correction' added to your credit report.
How do I rebuild my credit score after receiving a CCJ?
Make sure you meet payments on your CCJ and other credit agreements. If you think you might miss a payment, contact the lender as quickly as possible and discuss your options.
Minimise applications for new credit, certainly no more than a new one every four months.
And check your credit report and make sure all details on it – recent addresses, electoral roll - are up-to-date, including past details.
- Find out more: how to improve your credit score.
Does the size of the CCJ affect my mortgage application?
Yes, it does. It is perhaps not as vital as the time passed since it was received, but it is important. If the CCJ was beyond six years ago, it will not appear on your credit score and may even be ignored by your lender.
If it was within two years, a CCJ over £2,500 further complicates your mortgage application.
If your CCJ was within the past 12 months it would need to be a small CCJ – less than four figures – and any larger CCJs would start to greatly impact the size of the deposit you would be expected to have for any mortgage.