What is a CCJ?
A court can issue a CCJ against you if you fail to meet agreed repayments on a loan. Both individuals and companies can receive a CCJ. Your creditor will contact you several times before taking you to court. They will send you bills, reminders, and a formal letter of claim.
They will also tell you how to avoid court action. If you don’t respond to the claim form, the court may order you to pay the debt in full. In which case they will send you a judgement, outlining:
- The amount you owe
- Whether you should pay in full, or in instalments
- Who you must pay
- The deadline for payment
You can avoid this by responding to the claim form and explaining your financial situation.
How bad are CCJs for my Credit File?
CCJs are a matter of public record and will show on your credit report. How a CCJ is viewed by a lender might depend on:
- the amount involved,
- how much time has passed,
- whether the CCJ has been marked as ‘satisfied’.
Credit reference agencies are able to gather information on people’s credit habits. They do this to supply information to lenders, so they can make informed decisions when lending people money.
There are two types of financial information available. ‘Credit account information’ refers to how much you owe, and how you are managing those accounts.
‘Public information’ refers to credit issues handled by the courts or authorities including:
- administration orders,
- debt relief orders,
- IVAs (individual voluntary arrangements),
- information held on the Register of Judgements, Orders and Fines,
- and the electoral roll.
CCJs fall under ‘public information’. The record will be available to any 3rd party conducting a search in the Register of Judgements, Orders and Fines.
How do I find out if I have a CCJ?
You can check if you have a CCJ by doing a CCJ register search. You can also contact a credit reference agency. On the CCJ register there is a fee to search:
- £6 for a single search in England and Wales
- £8 for multiple searches in England and Wales
- £10 to search all registers.
If you were unaware of a CCJ, the courts would have sent notices, but the paperwork may not have reached you. Or, maybe you were simply not able to deal with correspondence at the time for whatever reason. Either way, you can get certainty by checking the CCJ register.
Can I get a mortgage with CCJs?
Yes, it is possible for you to obtain a mortgage if you have one or more CCJs on your record. Lender’s decisions depend on a number of CCJ mortgage criteria, including:
- When was the CCJ registered? The longer ago, the better. A CCJ registered in the last year will be more of an issue than one issued three years ago or more. A good-sized deposit will go a long way to countering the impact of a recent CCJ.
Age of CCJ Possible LTV Effect Less than 12 months A maximum of £1,000 should be owed to be considered for an 85% LTV mortgage. Within 24 months The debt should be a maximum of £2,500 for you to be considered for an 85% LTV mortgage. +2 Years If the CCJ is more than two years old, the amount will have little effect. However, if it is more recent, then the value will have an impact on the loan offer.
- How many CCJs you have. More than one recent CCJ will make life a bit difficult for you when applying for a mortgage. If you have a high LTV mortgage, lenders may not want to see more than two CCJs against your name from the last two years. However, they may be more flexible if you have a large deposit and the CCJs are more than 12 months old.
- The amount owed under the CCJ. If the CCJ was for a larger amount, you may have to accept a lower LTV. This could be 65%-75% – depending on the individual lender’s rules. These vary from lender to lender.
- Whether the CCJ was marked as ‘satisfied’, and when. You’ll still have options if it is ‘unsatisfied’. You will have a larger pool of lenders to choose from if you pay the debt.
Can I get a mortgage with a satisfied CCJ?
Many lenders will insist that the CCJ has been satisfied for a minimum of 12 months before applying for a mortgage. However, others will be happy so long as it is satisfied prior to applying.
Can I get a mortgage with an unsatisfied CCJ?
If you are unable to, or do not want to satisfy the CCJ, then the date of registration is important. Some specialist lenders will consider your application, but they will likely insist that the CCJs are at least two years old.
Frequently Asked Questions
- What mortgage lenders accept CCJs?
- How do I pay off my CCJ?
- What is the maximum size CCJ that lenders allow?
- Does having a CCJ reduce the amount I can borrow?
- I have paid my CCJ off - why doesn’t it show as satisfied on my report?
- What happens if I ignore a CCJ?
Across the market there will be many lenders who will consider someone who has CCJs on their credit file. The main aspects to being accepted for a mortgage are when the CCJ was registered and the amount. Invariably, if they are deemed too recent, many high street lenders will decline the application.
Fortunately, there are specialist lenders who are specifically geared towards lending to those that have CCJs. Criteria will be very specific. When using these lenders, we strongly recommend you utilise the services of a bad credit broker. Some of the recognised lenders in this sector are:
- Pepper Money
When a court rules against you, they will send you a judgement detailing:
- how much you owe (the debt amount plus any court or legal fees),
- who you should pay (not necessarily the court, more likely the creditor or their representative),
- when you should pay by and how you should pay.
If they are aware that you are in financial difficulties, the court may allow you to pay in instalments.
Criteria for loan applicants will vary from lender to lender. They will usually consider the age of a CCJ in conjunction with its size when deciding. Some lenders may be more lenient if:
- the CCJs are older than 2 years,
- if their value is less than £1,000 in the last year,
- or, £2,500 in the year before that.
If you are able to put down a bigger deposit, they are likely to be more flexible about CCJs.
Having one or more CCJ will affect what you could afford to pay on a mortgage. Because of this, it could influence what lenders are willing to offer you. The older the CCJ, the less impact it will have.
If you have more than one, and they’re comparatively recent and yet to be satisfied, this will carry more weight in their decision. As ever, if you have a sizeable deposit, then a lender is likely to be more flexible with their criteria.
If you have paid off the debt, the creditor or their agent should send you a letter confirming this. They should also contact the court to advise them you have satisfied the CCJ. This does not happen instantly, but you should request new copies of your credit reports. You confirm this through the three main credit reference agencies after a few weeks.
If it is still not showing as ‘satisfied’, then you need to notify the court right away for advice. Make sure you have a copy of the judgement details and proof of payments handy. They can provide you with a certificate of satisfaction for a small fee. You can show this to a prospective lender while your credit report details are updated.
It is never wise to sweep financial problems under the carpet. Ignoring a CCJ means in the least it will stay on your record as unsatisfied for six years. It can lead to action being taken such as a bailiff visit or a charge on your property.