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A CCJ – County Court Judgment – is a court order against borrowers who fail to repay a loan, entirely or partially. When you miss payments for longer than acceptable, a borrower is likely to file a CCJ. 

It is important to note that this is not the first step after a missed payment; by the time the lender decides to resort to a CCJ, it is like that they have sent regular reminders and warnings, including a formal warning letter informing the borrower of the consequences of failing to pay. 

All lenders will usually warn the borrower before commencing legal action and will try all dignified ways to get their payments before finally taking the matter to the court. 

Needless to say, the critical point that a CCJ comes at means that having one on your credit file certainly isn’t pleasant, and is bound to affect the possibility of getting loans in the future.

Once a CCJ is filed against the borrower, the latter receives a County Court form, which must be used to immediately explain the financial circumstances leading to the non-payment.

Essentially, this is the borrower’s chance to tell their side of the story. In cases where the explanation is accepted, the court will pay the debt, and the borrower will now owe money to the court according to a new agreement detailing installments and deadlines.

In the rare circumstance that one can afford to clear the money to the court in full within one month, the CCJ may not b recorded and will thus never make it to the credit history.

Getting a future mortgage with CCJs

The good news is that a CCJ does not tarnish your credit history and borrower reputation forever. 

The bad news, however, is that it still lasts on the credit report for a long time: six years. While you may think you absolutely cannot get another loan or a mortgage during this time, this is not true. 

While it certainly would be easier to get one without a CCJ, there are experts who specialize in these circumstances and can actually help you get a mortgage before the CCJ expires.

While this is good news, there are a few factors that need to be taken into account before attempting to get a mortgage with a CCJ.

Is the CCJ recent? – It may be hoping for too much to get a mortgage the same year you get a CCJ. However, if it is three years or more old, the chances of getting a mortgage are high. 

What further improves chances is a large deposit, which naturally secures your position as a borrower and poses a lesser risk for the lender, leading to a higher willingness to lend.

Is the CCJ for a large amount? – The large the amount you failed to pay, the lesser the loan you will potentially get. However, this usually only holds true for a recent CCJ: less than three years old.

Is the CCJ cleared? If you make the CCJ payment to the court one month after the court order and agreement, it will be marked as ‘satisfied’ on your profile, indicating that you have cleared all dues. Naturally, if you still owe money to the court, there are lesser chances of convincing a lender.

Other factors, like multiple CCJs, also significantly lower chances. However, all is not lost. 

There are ways for those with CCJs against their name to clear their file and their reputation and eventually bring their credit score back up. With the correct tips and guidance, you might even be able to secure a decent mortgage and mortgage rate with a CCJ. 

Speak to a mortgage broker to help find the best solution!