One of the most frequent questions we receive is whether paying off a County Court Judgment (CCJ), or a Decree – its Scottish equivalent – improves a Credit Score. To help answer this, we’ve put together a summary of what CCJs are and what they mean for you.
What is a CCJ?
Put simply, a County Court Judgment is a legal acknowledgment that a debt is owed. For example, if a credit card bill remains unpaid for a substantial amount of time, the lender may resort to court action to reclaim the funds. If successful, a CCJ will be issued for the amount (plus any court fees) which would need to be paid to satisfy the balance.
In the real world CCJs won’t only be issued by banks chasing credit card debt. CCJs can be issued for all sorts of debt from unpaid parking fines to rental arrears to defaulting on your car loan and everything in between.
There isn’t technically a minimum debt required for a CCJ to be issued, but the process of applying for one can be resource-draining, often taking substantial amounts of both time and lost revenue before any payments are secured. Because of this, issuing a CCJ is usually a last resort for a creditor. Exploring all other recovery options before deciding to issue a CCJ is standard procedure but, of course, this may vary.
Does a Satisfied CCJ hurt my Credit Score?
A CCJ is among the most severe entries you can find on a Credit Report. Any potential lender checking a Credit Report marked with a CCJ will immediately have red flags raised. After all, lenders look for stability and low risk in their customers, so the fact that a claimant has had to resort to court action to reclaim owed money is enough for them to reject the application all together or at the very least charge a much higher rate of interest.
Because CCJs are so serious, even one that is fully paid is likely to cause real trouble whenever you make an application. As such, whether it’s fully paid or left outstanding doesn’t really matter to potential lenders – it’s the fact that one had to be issued in the first place that causes such a sting. Creditworthiness is often calculated in such a way that no distinction between a Satisfied CCJ or an Active CCJ will be made – both statuses will severely affect your ability to get credit while the CCJ remains present.
What else do CCJs affect?
In addition to hurting your chances at being accepted for things like credit and mobile phone contracts (to name just a couple), CCJs can also stop you from securing a rental property and even slice your employment chances. Because CCJs are publicly available information, any landlord or employer can (and most likely will) perform a background check prior to accepting your application to check for exactly this type of thing.
How long do CCJs last on Credit Reports?
Unless a Court Judgment is paid within the first calendar month of issue (in which case it will be ‘set aside’) it will remain on your Credit Report for six years, regardless of whether the balance is paid or not. Once these six years pass, the Credit Reference Agencies will remove the CCJ so it won’t be visible to anyone checking your Credit Report.
Who do I contact if I have a CCJ?
If you have any questions about an existing CCJ, you can contact the court that issued the judgment for advice on the claimant, what the debt relates to, and setting up repayment. Courts also have a dispute procedure to follow if you believe it’s been unfairly issued.
Your Credit Report will detail which court issued the CCJ along with the case reference number, giving you everything you need to investigate further.
How do I check if I have any CCJs?
Checking your Credit Report is the first port of call to see whether any CCJs are listed against you. It will allow you to see if any Court Information will be visible when a lender, landlord or employer checks your Credit Report for themselves.
If you haven’t already, you can check your Multi Agency Credit Report with checkmyfile. It’s free for 30 days, then just £14.99 a month - which you can cancel at any time. Sign-up is easy and cancellation is fuss-free. Our Credit Report is the only place in the UK where you can see and compare data from the three main Credit Reference Agencies together in the same format – ensuring that there are no gaps for entries to slip through.
Updated on 21/11/2019 by Sam Griffin