What is a County Court Judgement (CCJ)?

We speak to clients all the time that have ended up with a CCJ and sometimes they didn’t even know they had one until they were declined for a mortgage. It can be quite difficult if not impossible to remove a CCJ from your credit report once it is on there. 

CCJ’s are no longer viewable on your credit report after 6 years but it is possible to get a mortgage before they actually disappear. The longer ago it was registered the easier it will be but you can expect to put down a higher deposit than usual if your credit score has been adversely affected. 

Is It possible to get a mortgage with a CCJ?

Malcolm

Hi, it's Malcolm, and today Wayne and I will be talking about CCJs (county court judgments).

CCJ's is what you might find on your credit file If you've failed to put payments on a bill or a credit agreement, you might see a county court judgment appear on your credit report.

The big question is, is it possible to get a mortgage with a CCJ?

Wayne

Lenders will look at what factors were around it when it was long ago since the CCJ was issued, things like having you satisfied it.

The general rule is the further away you are from the date that that was issued, the more likely you would be to get the mortgage.

How do mortgage lenders look at CCJ’s?

Malcolm

There's a bit of a common misconception on CCJs that people think that after six years, it's gone, and you won't need to worry anymore. That's not quite the case.

Wayne

The six-year thing tends to be how far back lenders will look at your credit history. The issue is if you've had a debt that went to a judgment, and you are still paying it back even if it's beyond six years ago.

If it's apparent that you're still paying the debt back, that can always then come into the equation because it’s an ongoing commitment.

CCJ Mortgage Advice

Malcolm

You just can't see it anymore because the lenders aren't looking back quite that far. Then we see county court judgments on a customer's credit report, what type of items would they have been for?

Wayne

Historically, it used to be things like you cancelled it, but it turns out that you didn't cancel it. Then often, the communications company will then make a judgment for any outstanding amount.

Malcolm

We hear quite a lot that the less that you meant to get through to say that your application's going to court, and you got your right to pay it off, and sort of never quite land on the doormat.

Wayne

It's tough to get it removed. You've got to be able to prove that it should never have been issued in the first place. But more often than not, you've just got to pay it.

How having a CCJ may affect your chances of getting a mortgage

Malcolm

It has been known to happen, but it is in the minority. If the CCJ's still showing on your credit report, but it's five years ago rather than last year, would you have more chance of getting a mortgage?

Wayne

The further away it is, the more likely you would be of getting a mortgage. Indeed, some of the non-standard lenders, the not-quite mainstream lenders, the specialist lenders, would typically tend to look at that.

Again, they'll all have their own rules; They will look at how many you've got. If it's just a one-off, and they can see that it's just a one-off blip, whereas if you've got multiple CCJs.

It might be more difficult because that would tend to indicate that there'd maybe be a more systematic reason for you not paying your bills.

Malcolm

The thing as well as if it's just happened, it's more difficult for them to tell if you're going to have another CCJ for something else.

Wayne

If it's something that happened five years ago and nothing else has happened since, and they can see that your payment history has been profitable since then, they're probably going to be happy that it's not going to happen again.

Whereas if it happened recently, then how do they know it's not going to happen again?

Will you be stuck with a CCJ mortgage forever?

Malcolm

If you have had a default, or if you have had a county court judgment, and we can only get you a mortgage with one of these specialist lenders where the rates are higher and that potential arrangement fees are higher.

Will you be stuck with that mortgage forever?

Wayne

Lenders know that you are only going to them because you're in a particular set of circumstances.

If you've done things correctly, you've kept your mortgage payments up to date; your credit score's improved enormously, it might be that the old CCJ's now dropped off your credit report altogether. It gives you much more of an opportunity.

Pay off your CCJ or save for up for your mortgage deposit?

Malcolm

What about satisfying an unsatisfied CCJ?

We've got an amount of cash, we've accumulated savings towards the deposit, we've found out we've got a CCJ.

Should we use some of that cash to satisfy that CCJ, or should we keep that cash towards a deposit. Would it help our credit score?

Wayne

It depends on the CCJ. For some of the high street lenders, if you have less than £250 satisfied CCJ that they can see is a one-off, it may well be worth satisfying that.

If you've got more severe amounts of money than that, or multiple CCJs, a lot of the specialist lenders, it almost doesn't matter to them whether it's satisfied or not.

Malcolm

You had this life event, these issues happen, but you've been squeaky clean for the last 24-36 months. You'd have a decent chance.

Mortgage advice for CCJ’s

Wayne

The general answer is if you can do it and afford to do it, then it can't be a bad thing to settle it.

However, suppose your circumstances are you're probably going to have to go down the specialist-lender route. In that case, it probably won't make an awful lot of difference to their decision.

Malcolm

Overhaul, it's not impossible to get a mortgage with a CCJ. The longer ago it was in the past, the more comfortable you're going to find it. You've got to go to a specialist lender.

You will probably be looking at least for the first few years at paying a high rate of interest on your mortgage.

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