If you’ve failed to repay your debts in time and the person you owe has issued you with a County Court Judgment (CCJ), it’s normal to worry about the impact this could have on your finances – especially your credit score.
But how many points will your credit score decrease by and how quickly will it recover? Whether you’re in the middle of a CCJ or you’re anticipating court action, it can be useful to know what to expect.
What is a CCJ?
A County Court Judgment (CCJ) is a type of court order that can be issued against you if you have an unpaid debt and the person you owe (your creditor) has asked the court to help them recover the money.
If you’ve received a CCJ, it means the court has agreed that there is a debt to pay and you must pay it. Depending on the information you provide, they will order you to repay the debt in full (judgment forthwith) or in monthly payments (judgment in instalments).
CCJs are usually used as a last resort when other forms of legal action have been unsuccessful and your creditor is looking to recover the money owed relatively quickly or wants to stop it from becoming statute barred (expired). Once a CCJ has been issued, there is no time limit to enforce the judgment.
How will a CCJ affect my credit rating?
Unfortunately, a CCJ can have a substantial effect on your credit rating and your ability to get credit for a number of years. Once it has been added to your credit file, it can significantly decrease your credit score and make it challenging to secure anything from a loan to a mortgage.
There is no set number of points that your credit score will decrease by when you receive a CCJ. However, depending on your current credit score, you should expect to lose around 250 points on average. This will be in addition to the points lost due to the missed payments or defaults that led to the CCJ which, in some cases, can have an even worse impact on your credit score.
With a CCJ on your credit file, lenders will be able to see that you’ve struggled with debt in the recent past and will be hesitant to enter into another credit agreement with you. This will make it difficult to get approved for anything that requires a credit check, such as a mobile phone contract and even a bank account.
How long will my CCJ be visible?
From the date your CCJ is approved, it will be visible on your credit file from each of the three credit reference agencies for six years. During this time, your credit score will decrease and lenders will be able to see you have a CCJ, making it difficult to get approved for most credit products.
It will also be added to a public register called the Register of Judgments, Orders and Fines for six years. This is an online database that can be viewed by anyone for a small fee but it is usually only accessed by people who need to check details of your credit history, such as lenders, landlords, and some employers.
The CCJ will be visible on your credit score and the public register for six years regardless of whether you pay it off during this time. The only time a CCJ can be removed sooner is if you repay 100% of the debt within a month or successfully appeal to get it removed.
How much will my credit score go up when a CCJ is removed?
Once your CCJ has been removed from all your credit reports, your credit score will naturally improve.
However, it can be difficult to estimate how much your credit score will improve and the exact number of points depends on several factors. On average, you can expect your credit score to increase by around 250 points.
Furthermore, while not having a CCJ on your credit report will certainly improve your chances of getting credit, most credit companies tend to focus on your credit history as a whole as opposed to just your credit scores.
There are also several things you can do during your CCJ or when your CCJ is nearing the end to boost your credit score ahead of it being removed. Put simply, the more things you can do to prove you’re a reliable lender, the more likely lenders are to approve you for credit.
Can you remove a CCJ early?
Having a CCJ on your credit report for six years can cause all sorts of financial difficulties. However, you may be able to get a CCJ removed before six years in certain situations, such as:
If you pay the debt in full within one month
If you’re in a position to pay the debt in full within one month of receiving the judgment, the CCJ will be removed from your credit score and the public register immediately – almost as if it never existed in the first place.
This option is recommended if you can afford to pay off the debt in full or if it’s been less than a month since the CCJ was issued – especially if the debt is for a small amount (e.g. a parking charge). By dealing with the CCJ promptly, you can get it removed from your credit score and stop it from affecting your finances for six years.
If you apply to have it set aside
If you don’t think you should have been issued with a CCJ, you can apply to have it set aside (cancelled). This will remove it from your credit record, allowing you to maintain a healthy credit score and borrow further credit if necessary.
However, it’s usually only possible to set aside a CCJ if you have a good reason for doing so. For example, if the judgment was made in your absence, there is an error in the judgment, or the judgment was sent to the wrong address.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
What happens after a CCJ?
Even if you’ve only just received a CCJ, it can be useful to know what to expect after six years pass and it’s removed from your credit report. We’ve outlined what’s likely to happen after a CCJ below:
Your credit score will improve
Once the CCJ has been removed from your credit report, your credit score will gradually improve. There are also various steps you can take to ensure your credit score increases, such as registering to vote and making payments in full and on time.
It will be removed from the public register
The CCJ will be removed from the public register (as well as your statutory credit report) six years after it’s added – regardless of whether or not it’s been paid. This means that future lenders won’t be able to see you had a CCJ, making it easier to access further credit.
How can I improve my credit score after a CCJ?
It can take some time to see your credit score improve after a CCJ, but there are some things you can do to speed up the process. We’ve outlined the steps you should take below:
Register to vote
Registering to vote is one of the quickest and easiest ways to rebuild your credit score after a CCJ.
Lenders use the electoral roll to verify your contact details and rule out identity theft. Therefore, if the information on your credit application matches up with the information on the electoral register, your creditworthiness will automatically increase and you’ll find it easier to get approved for credit.
Make payments as agreed
One of the largest contributing factors to your credit score is your ability to make payments in full and on time.
This is because it proves that you’re capable of managing your money and can be trusted to enter into another credit agreement. If you struggle to pay your bills as outlined in the original terms and conditions, consider setting up automatic payments.
Check your credit report
Checking your credit profile for errors is key to ensuring your credit score is reflective of your current financial situation. While rare, a simple mistake could mean your credit score is lower than it should be and this can impact your ability to get credit after a CCJ.
Generally, you should request a free copy of your credit report at least a few times a year after a CCJ to ensure the information listed is correct and up to date. This can be done through various platforms, such as Credit Karma.
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Conclusion
Having a County Court Judgement (CCJ) will negatively affect your credit score and make it difficult to access certain types of credit for several years. However, the impact of a CCJ on your credit score isn’t permanent and there are various things you can do to improve your creditworthiness over time.
Once a CCJ has been removed from your credit file – either by waiting six years, paying it off early, or getting it set aside – your credit score will naturally improve and you’ll be more likely to get approved for credit.
There is no set amount your credit score will improve after a CCJ has been removed, but it is typically around 250 points.