If you’ve never heard of a CCJ, it stands for County Court Judgement… and be warned, you don’t want one of these marked on your credit history.
If you fail to make your repayments on time and in full, your lender could take you to court and get a CCJ against you – which is a formal court order to ensure you pay back what you owe.
Having a CCJ will massively affect your credit score and give you an adverse credit history. This could stop you from getting approved for credit or make it more expensive for you to borrow.
But don’t worry, you won’t receive a CCJ from just one missed payment. You’ll usually get one if you miss at least three payments. Plus, your lender will have to issue you with a default, before they can start legal action against you.
The secret to getting a CCJ removed (well, the four secrets)
1. Pay the remaining balance within a month
If you’re issued with a CCJ, you can avoid it from showing on your credit history if you pay off the balance within one month of the judgment. We strongly suggest you do this if you’ve just received one! You’ll have to ask the lender you’re paying to tell the court that it’s been successfully paid – if they don’t do it within the month timeframe, you won’t be able to get the CCJ taken off.
If the lender isn’t playing ball, you can take matters into your own hands. You’ll need to send proof of payment to the court and pay a charge – but the small fee is well worth the benefits of a clean credit file.
2. Apply to get the CCJ set aside
You can only apply to have your CCJ set aside (or cancelled in other words) if it’s a ‘default judgment’. A default judgment means you never knew about the CCJ so couldn’t put forward your defence. However, you shouldn’t argue the CCJ and try to have it set aside unless there’s a good reason as there’s a fee involved in this.
3. Be patient
Financial mistakes are automatically wiped from your credit report after 6 years (or 72 months). This is the best and easiest option if you got the CCJ a while back. The more time that passes since your CCJ was issued, the more likely lenders will be to overlook it (only if you have a clean sheet from there on).
4. Don’t get one in the first place
If you’re experiencing financial difficulty, be sure to make contact with your lender and explain that you’re struggling to pay. You should be able to agree a repayment schedule with them that you can afford, such as reducing your monthly payments by spreading them over a longer period. Stick to your new terms and you won’t be handed that CCJ.
If all else fails, make sure you pay off the CCJ as soon as possible. This will show on your credit file as ‘satisfied’ and lenders will look at this more favourably when assessing you for credit.