How Finbud Mortgage Brokers Can Help You
A bad credit score can be brought on by any of a number of occasions, for example missed payments on loans, overdue payments on cards and outright payment defaults. The lack of a credit history will make life incredibly difficult once you have to make an application for a mortgage. These various ‘poor credit incidents’ influence your credit rating in various ways.
Among the most damaging things you can have connected to a name with regards to your credit standing is that a County Court Judgment, or CCJ, that may hamper your odds of getting a credit card, opening a bank account – or finding a mortgage.
What is a CCJ?
A County Court Judgment (CCJ) is a court order made in England, Wales or Northern Ireland which may be filed against you in the event of you failing to make agreed repayments. CCJs could be issued to both people and businesses.
Remember that by the time you reach this point you may have experienced quite a lot of correspondence from the lender. Also routine invoices and reminders, there’ll have been a formal letter cautioning you that in the event that you don’t repay the debt or don’t get in contact to make arrangements to cover it then legal action could begin. It is going to also explain what measures you may take to prevent proceedings from moving ahead.
If you take no action at this point, the next thing you may get is a County Court claim against you. It’s very important that you respond to this immediately. If you do, you are able to explain your financial conditions, which will then be taken into consideration when a decision is made. If you don’t, you may be ordered to cover the sum in full plus interest, immediately. You should also react if you dispute the debt, as it will give you the opportunity to present your side of this story.
If the court decides there is a debt to pay, You will Be delivered a ruling detailing:
- Just how much you owe
- The best way to cover the debt (in full or by instalments)
- The payment deadline
- Who you should pay now
If you pay the debt in full (including any interest and court charges ) you’ll avoid having a CCJ listed against you. If you don’t, then it’ll be recorded on that the Register of Judgments, Orders and Fines. This means it will show in your credit report.
How long before a CCJ will expire?
Records of judgements stay on the Register of Judgments, Orders and Fines — and so also in your own credit accounts -for six years.
From our own study we have discovered that 71 percent of people don’t understand just how long that a CCJ has to become forgotten and, furthermore surprisingly, 40 percent of people believed a CCJ proved to be a permanent mark on their credit report .
The fantastic news is that this isn’t the situation, all poor credit marks can be removed from your credit history in the long run and you don’t have to wait for this to take place before being considered for a mortgage. With the right expertise and advice it could be possible that you receive a mortgage earlier than you may have anticipated.
As we mentioned previously, if you pay the debt in full (including any interest and court charges ) within a month of getting the judgment, then you won’t even possess a CCJ listed against you. If you clean the debt after more than 1 month after receiving the ruling, it will be marked on the CCJ register as satisfied , so people will understand that you have paid it off.
How do CCJ's effect my credit file?
Credit reference agencies collect information about how people handle their debt and credit obligations plus they make that information available to creditors, to assist them in making decisions regarding who to expand credit to. They collect two main forms of data: public information and credit account information.
Credit account data relates to how much you owe the many different lenders that they have accounts with , and also the way you handling those accounts.
Public data relates to bankruptcy, debt relief orders, individual voluntary arrangements (IVAs), and administration orders; it also has data stored on the electoral roll, along with the Register of Judgments, Orders and Fines.
CCJs, therefore, fall under the heading of public information. Anyone searching the CCJ register will observe the information related to the CCJ.
At any time you submit an application for a financial product such as a mortgage, personal loan or perhaps a mobile phone contract, then creditors will use the information contained in your credit report to check if you’re creditworthy. A CCJ will stay on your credit report for 6 years, but when it’s been indicated as ‘satisfied’, they will be aware you settled your own debt. CCJs after 6 years, typically do not have any effect on your credit rating.
How do I know if I've Got a CCJ?
In case you were denied credit before and you’re not certain why, you are able to access the Register of Judgments, Orders and Fines for one-time charge of £4.00 and also do a CCJ check against your name. As an alternative, you may ask to see a copy of the data held on you by the credit reference agencies.
We frequently receive enquiries from people asking ‘How do I know whether I have CCJs?’ , so don’t be worried if you’re not sure where you stand in regards to having a CCJ. Perhaps the situation around the debt weren’t apparent, or for any reason you’re not able to manage the paperwork in the moment, or maybe you never received the initial correspondence in the first instance
The majority of people are going to be given a notification in the courts highlighting the details, but if you’re not certain, or in the event that you cannot recall how long ago it all occurred, you may always find out by looking at the CCJ register.
Can I get a mortgage with CCJs?
The great news is that yes, it is possible to obtain a mortgage when you have one or more CCJs on your credit file. However, there are a number of key factors that will impact on a lender’s decision. These include:
- Just how lately the CCJ was registered against you: the older a CCJ is, the better. If it had been registered over three years back then you stand a much better chance than when it had been registered within the previous calendar year. One thing which can be helpful in case you’ve got a newly registered CCJ is using a decent sized deposit.
- The number of CCJs you have: In case you’ve got one or even more recent CCJs, then your choices are more restricted than if you’ve only 1 CCJ enrolled numerous years back. As a rule of thumb, if you’re trying to find a mortgage using a high loan-to-value (LTV) ratio, then a creditor won’t wish to see more than two CCJs recorded in the previous couple of years. In case you’ve got a larger deposit then they are more likely to be flexible, given the CCJs are more than twelve months old.
- How much was the CCJ for: some creditors have rules regarding the value of CCJs that in turn affect the LTV ratio that they are prepared to offer you. Incidentally, that doesn’t mean if you’ve got larger value CCJs you cannot find a mortgage, but may need to accept a lower LTV — say 70% to 75%
Affordability for a bad credit mortgage
All mortgages, in spite of the credit status of the client, are subject to an affordability check as part of this process of exercising what amount of loan is going to be provided.
For individuals with CCJs in their own credit record, this could possibly be assessed otherwise, particularly if the CCJs are unsatisfied or recent. This may imply that while you’re approved, you are not permitted to borrow as much as if you had no CCJs. The mortgage will most likely cost you more in fees and interest rate. Remember, however, that most problems are able to be solved, and also a professional mortgage broker can help navigate the barriers and choices.
Fix your credit rating
In case you’ve got a CCJ on your name, all isn’t lost. Not only can we canvass the marketplace that will assist you to find a fantastic deal on a bad credit loan with a CCJ, however, in addition, there are a variety of steps you can take to enhance your credit score.
Speak to an expert
At Finbud we’ve got a specialist team that endeavour to assist our customers secure cheap bad credit mortgages with CCJs and other negative credit events. People that have combined credit histories are often best served by niche lenders that may not be located on the high road. With years of expertise working with a community of adverse credit lenders across the united kingdom, we know just where to turn to discover a mortgage to suit the specific needs of each client, irrespective of their credit history. As whole of market brokers, we’ve got access to a broad segment of the current market, so we are not tied to any specific lender. This impartiality and unlimited access into this marketplace gives us the very best chance of getting a competitively priced bad credit mortgage with a CCJ.
Frequently asked questions
What is a CCJ?
A County Court Judgment, or CCJ, is a court order which may be filed against an individual or a business if they don’t maintain their debt obligations. They apply in England, Wales and Northern Ireland.
Creditors generally only resort to legal actions as soon as they’ve sent a variety of invoices and reminders which were ignored. The last communication is going to be an official letter warning that in the event that you do not react, legal actions will begin.
If you do not do anything, the case will proceed to the courts and if the court agrees there is a debt to be paid, then you will be delivered a judgment comprising all of the specifics. The amount owed will include any interest and court penalties which apply. In the event you do not pay within a month, then a CCJ will be recorded .
CCJs are listed in the Register of Judgments, Orders and Fines, and show in your credit report. Records of judgements stay on the Register — and on your own credit file for six years.
How you can remove a CCJ?
A CCJ will typically remain on your credit file for six years from the date it is first registered. However, it can be removed should it be paid within 30 days of having the CCJ registered against you or where it is acknowledged by the plaintiff as being registered in error. We recommend you initially contact the organization involved along with the credit reference agency it’s registered with.
What is the maximum value CCJ allowed?
Various lenders have different standards, and they frequently tie the magnitude of a CCJ to its age when making a determination. By way of instance, a lender may ignore all CCJs more than a couple of years old, and take two CCJs over the past two years– given the value is no more than £1,000 in the last year, and no longer than £2,500 from the year earlier. Broadly speaking, the larger the deposit you’ll be able to provide, the less strict they are likely to be.
How to pay off my CCJ?
If you’re taken to court by somebody who you owe money to and the court insists there’s a debt to be paid, then you’ll be delivered a judgment. This may include all of the pertinent details you want to understand, and will inform you:
- 1.Just how much you owe; this is going to be original debt, and any court or interest penalties which were added.
- 2.Who are you meant to pay; do not automatically assume you need to send the money to the courtroom, it’s more likely you’ll have to pay the lender/creditor.
- 3.When you ought to pay by.
- 4.The best way to pay; if you’ve clarified that you’re in financial distress, the court could permit you to pay in instalments. The judgment will explain to you just how much and how frequently, and you ought to agree the payment procedure (e.g. monthly standing order) with whomever you owe.
