If you’ve had a County Court Judgement made against you in the past, your ability to secure further credit will definitely be restricted. A CCJ happens when a creditor that you’ve failed to pay your bill to applies to the county court, in the hope that the judge will order you to make the payment. Often, people don’t even know that they’ve had a CCJ, but it affects your ability to borrow money.
When you apply for a loan, or any credit, the lender will generally use a credit reference agency to give them a report on your credit rating and history. These agencies look at various sources of information about your past finances, and if you’re had a CCJ this will likely be recorded on a register that they check. If you failed to pay what the judge ordered within a month of a CCJ, it stays on record for 6 years.
Although many lenders will simply refuse you a loan if you have a bad credit rating, there are many who will still consider you if you have a CCJ. The drawback is that you will almost certainly not receive the best deals on a loan. If a lender sees you as a risky borrower, which they will if you’ve had a CCJ, they will look to reduce the risk to them in any agreement they give you.
A lender who is happy to give you a loan after a CCJ may ask you to secure the loan, using any property you may have as collateral. If you’re a homeowner or own a car, for example, you may be able to use this. This is where you have to be really careful, as if you fail to keep up with the loan payments whatever you’ve used as collateral is at risk. Depending on what the loan is for, it may not be worth this risk.
Whatever type of loan you’re offered, if you have a CCJ it’s likely to incur pretty high rates of interest. You should make sure you know how much it’s going to cost you, each month initially, and over the period of the loan. Also work out how much you’ll end up paying back in total, and how long it’ll take, bearing in mind that the less reputable lenders may intentionally make the terms of the loan difficult to understand.
Getting a loan after a CCJ is almost certainly going to cost you a substantial sum of money in interest, as well as putting any collateral at risk. You should really only use this if you’ve explored all other options, as it may well just land you in further financial trouble.
If you are thinking about getting a loan, try to find out as much as you can about the lender and only borrow from them if they are indeed reputable. It goes without saying that the lenders who’ll consider you are going to do whatever they can to make it worth their while, which is probably going to make it less appealing to you.
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