As consumers, a county court judgment (CCJ) is something we must never hide from because to do so can significantly impact your credit rating.

A credit rating or credit score is a numerical value given to an individual’s creditworthiness. It is presented at any given time of your credit history, providing a snapshot of how reliable you can be at managing and repaying debt. It therefore follows that these credit ratings are used by lenders to assess the risk of lending to an individual amongst other things.

What is a County Court Judgment (CCJ)?
A CCJ or money judgment is a type of court order that forces you to pay the sum stated. It is a debt that can be enforced against you in a variety of ways. If a creditor or lender takes you to court and you do not respond to the court claim, or if you lose at a final hearing, or by some other court procedure, a CCJ will be made against you. This judgment will state that you owe the money and provide instructions on how and when you must repay it.

How CCJs Affect Your Credit Rating

Credit Score
Once a CCJ is recorded, it will be entered into the Register of Judgments, Orders, and Fines. Credit reference agencies access this register to update your credit report. A CCJ will significantly lower your credit score, as it indicates to potential lenders that you have failed to meet your financial obligations.

Duration on your credit report
A CCJ will remain on your credit report for six years from the date of the judgment, regardless of whether you repay the debt. During this period, it can severely limit your access to credit and financial services and facilities.

Impact on ability to borrow
With a CCJ on your record, lenders may view you as a high-risk borrower. This can result in higher interest rates, stricter lending criteria, or outright denial of credit applications. Securing mortgages, credit cards, personal loans, or even opening a new bank account can become challenging.

How to deal with CCJs

Immediate payment
If you pay the full amount owed within the first month of the judgment, you can apply to have the CCJ removed from the register.

Always clear the debt
If you settle the debt after the first month, the CCJ will be marked as ‘satisfied’ on the register providing you take the appropriate steps to have this recorded. Whilst this won’t remove the CCJ from your credit report, it shows lenders that you have fulfilled your obligation, which may slightly improve your credit prospects.

Take court action
If you believe a CCJ was entered against you incorrectly you can apply to have the judgment set aside. If successful, the CCJ will be removed from your credit record, potentially restoring your credit rating. Keep in mind however that court procedure and rules are strict. If you are unsure where you stand, you are encouraged to seek independent legal advice.

Do not ignore CCJs
If you are dealing with a CCJ or require assistance with any related matters, please do not hesitate to contact Rhian Lowe at Fisher Jones Greenwood LLP – [email protected] or call 01245 584520.