Received CCJ? Learn to Improve Your Credit Score and Qualify for a Loan
A county court judgment (CCJ) has the capability of impairing your credit score. It impacts your ability to qualify for any type of credit for 6 years after receiving it. That means credit coming from loans and credit cards will be out of your grasp till the time CCJ is present on your financial report.
However, you can do something to minimalize the effect of a CCJ if you are prompt in your response and take the proper steps to improve your credit score. You can increase your chances of taking out loans at favourable terms from many lenders. You can quickly get loans for CCJ if you follow the correct attitude.
CCJ makes it tough for borrowers to avail of any loan, but it is possible to meet your financial requirements even after having it. But with the proper guidance, you can not only secure a loan but also improve your credit score quickly.
Methods to mend your credit score and obtain a loan after receiving a CCJ
Before moving forward, first, understand what actually CCJ is.
CCJ stands for county court judgment which is issued by the court on a person’s name if he/she fails to repay the owed money. It happens when a creditor takes legal action when an applicant doesn’t keep up with the repayments.
If you have received CCJ, you should respond to it within 14 days after its issuance. You will never receive it without a prior intimation. The letter contains all the information regarding what will be the next course of action and the repercussions if you don’t respond on time.
You should never neglect it. Otherwise, you will be taken to court, and things can worsen.
What will happens if you fail to make the payment after receiving CCJ?
If the court has asked you to repay your debt and you fail to do so. Then your creditor has all the right to request the court to enforce the CCJ.
If this happens, then legal officers can visit you and seize your property, which can be used to repay the debt. The court can also ask you to pay your liability from your pay which is known as an attachment of earnings order.
How does the credit score gets affected by a CCJ?
If you immediately pay off the owed money, it will never get recorded on the legal register and won’t affect your credit score. But if you default on your debt, then it will get recorded, which will drastically ruin your credit report.
Having a CCJ on your finances negatively impacts your credit score. Whenever you apply for funding, your lender checks it and gets an impression of a risky borrower. You also can face denial on your loan application as you have already failed to keep up with your repayments.
For how long a CCJ stays on your financial report?
Once issued in your name, a county court judgment stays on your credit report for the next six years even after paying off your debts within this timeline.
Once you have paid and this period is over, it disappears from your credit report.
What are the financing options for a borrowed having a CCJ?
You might think that with a CCJ, you won’t be able to meet your immediate financial needs. But there is no truth to it. It is possible to apply for loans with CCJ.
- Guarantor loan
You can apply for a guarantor loan with a CCJ. You will be required to add a cosigner or guarantor to your loan agreement. A cosigner will agree to make payments of the loan if in case you are unable to do it.
If the guarantor has an impressive credit score, then you can easily borrow the maximum amount of money from the lender.
- Secured loan
You can also apply for a secured loan with a CCJ. In this type of loan, you will be required to put an asset as collateral security to get the desired amount of money.
Collateral security can be your vehicle, property, valuable jewellery, etc. As a secured loan is less risky to the lender, you can quickly get approval on your loan application.
It is important to note that if you fail with your repayments, then you will be at a significant risk of losing your asset, which you will put as a security for the loan.
- Payday loan
The amount offered in payday loans is generally small. You can borrow the desired amount of money for a short period. Usually, it is repaid within a month or the next paycheck day of the applicant.
Before disbursing the money, a lender who offers a payday loan never gauges your credit score. It depends on the lender to lender whether a CCJ concerns them or not. Many lenders provide it quickly with no paperwork, but some might not get convinced to give you a payday loan with a CCJ.
If you apply for any of the above loans, you have to make timely repayments or early. This will enhance your credit report, which will allow you to get more funding options in the future.
How can you rebuild the credit score after a CCJ?
You can try doing the below-mentioned things to improve your credit score after receiving a CCJ.
- Register your name for the voting roll
- Pay off your other debts
- Meet all the balance of repayments for CCJ
- Don’t apply for several credit options
- Make sure your credit score is correct in the statutory report
Final thoughts
If you face financial difficulty, you can also apply for the loans with CCJ, as we mentioned above. Pick one of the financing options that meet your affordability and needs.
The best way to remove CCJ from your life is not to create such circumstances to receive it in the first place. Try to avoid getting it. You can do it by making your repayments on time.
Pay all your bills, minimum credit card payment, other mortgages, and debts within the predefined timeline. This practice will not only mend your credit report but also opens the door for future loaning options.
