A CCJ (County Court Judgment) can seriously affect your borrowing power. Lenders issue a CCJ when they doubt that you will not pay off what you owe. It shows up on your credit report for six years that means you are barred from accessing credit card deals, loans and even a mobile contract.
However, some direct lenders provide CCJ loans with no guarantor to assist borrowers when they come across an emergency, but this option is available only when you have already settled your CCJ. You must remember that these loans cost high interest rates because of very poor credit rating.
Once a CCJ has been issued against you, it becomes paramount that you quickly settle it. Otherwise, you will not get even a loan with very poor credit. A CCJ is added to a public database that can be shown by anyone. You can avoid it to be seen only under two conditions: if you settle your account completely within 30 days from the date of issuance or if you dispute the CCJ and prove that it was issued mistakenly. Here are some steps to get the CCJ off your credit report.
You can dispute a CCJ only when you know that you do not owe the debt and the lender has mistakenly issued it against you. You must have genuine legal grounds to prove that you do not owe the money. As soon as you receive court orders, you must request the court to set it aside by filling out form N244 or writing a letter. Once you become successful to prove that you do not owe the money, CCJ will be removed from the register of judgments.
Pay off the debt within a month
Of course, you will not be able to dispute it if you have fallen behind repayments and all methods of recovering money from you have exhausted. You cannot escape the obligation to pay back the entire money you owed from your lender.
You will have a period of 30 days to clear all dues to avoid having a CCJ on your credit report. You must remember that you cannot get it off your report unless next six years if you fail to reimburse the debt within the given timeline – even one-day late payment cannot help you. However, ‘satisfied’ will be notified in your report. This will badly affect your credit score. You will eventually fall into a category of borrowers with very poor credit history that means you will get a loan with very high interest rates.
You will need to obtain a certificate from the court by paying nominal fees to confirm that you will pay off the debt. As you pay back the debt, the lender will inform credit reference agencies of your payment and they will immediately remove it from your credit file.
Wait until six years pass by
If you fail to pay off your debt within 30 days from the date of issuance of a CCJ, you will have to wait six years from having it removed from your credit file. Once six years pass by, it will disappear without you having to do anything.
How to improve your credit score after a CCJ
When you have repaid your debt, the report will show a settled CCJ, but it will be still difficult to have a loan approved. You need to work on building your credit rating. First off, you should register for the electoral roll at your current address. Try to minimise the number of applications and avoid using your credit card as much as possible. Have a free copy of your credit file and see all information is accurate and up-to-date. If you think that you cannot pay off the debt on time, talk to your lender to know other repayment alternatives.