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Bad Credit Mortgages – How do CCJs Affect my Application?

What is a CCJ (County Court Judgement)?

If you miss payments on credit agreements, known as defaulting, then you will be given fourteen days to repay the debt. If you fail to repay within that time frame, the creditor will make a number of attempts to reclaim their money.

If you do not repay the debt at all, the creditor will likely issue a County Court Judgement (CCJ). A CCJ will affect your ability to get a mortgage, with many high street lenders not willing to consider those with current CCJs at all.

Can I still get a Mortgage if I have a CCJ?

The quicker that you act with a CCJ, the better your chances are of being able to secure a mortgage. It’s possible that a CCJ will not even appear on your credit file if you paid the debt within thirty days of its issue.

Once the CCJ appears on your credit file, your options for obtaining a mortgage are reduced, however, it may be possible to secure one with a specialist lender. This will depend on a number of other criteria, however, such as whether you have other credit issues, how long ago the CCJ was registered and what it is related to. If you have missed repayments on your mortgage in the past, then this will be considered more of a concern than an outstanding mobile phone bill, for example.

Does the Date of a CCJ Matter for a Mortgage?

If the CCJ is more than six years old, it will no longer appear on your credit file, so won’t affect you applying for a mortgage. If the CCJ is less than six years old, then your chance of obtaining a mortgage will increase, the longer ago it was registered.

Those specialist lenders who are willing to consider CCJs will also often have different criteria to each other, for example, some may be concerned with if or when the debt was settled, with others only focussing on the age of the debt.

Does the size of the CCJ affect my mortgage?

This will vary from lender to lender, depending on their individual acceptance criteria, however it is likely to have some impact on their decision, especially if the CCJ was registered for a particularly large amount.

How long ago you were issued the CCJ is important, however, the length vs. size of debt can also be an issue. For example, for a CCJ less than two years old, it’s likely to be more difficult to secure a mortgage if the CCJ was £2,500 or more. If it’s very recent, in the last year, lenders would be looking for the figure to be less than £1000.

Can I get a CCJ Removed from my Credit File?

If you paid off a CCJ within the allowed thirty day period and are able to prove this, then a mark should not appear on your credit history. If the CCJ is visible and you can prove that it was either paid in time or was not paid in time through no fault of your own (i.e postal delays), then it’s possible to have it removed.

A ‘notice of correction’ can be added to your credit report, although it’s important that you make all credit referencing agencies aware, as they do not necessarily share data.

How can I rebuild my credit score after receiving a CCJ?

So long as you can prove that you’re now a responsible borrower, it will be possible to rebuild your credit score after a CCJ. The following tips will help you to rebuild your credit:

  • Prioritise the repayment of your CCJ
  • Try not to apply for any further credit
  • Check the accuracy of your credit report regularly (address details, incorrect marks etc)
  • If you’re not registered on the electoral roll, ensure you register at your current address
  • Close old accounts and remove financial attachments with others, especially if they also have bad debt
  • Don’t miss any future payments

How can speaking to a Specialist Mortgage Broker help if I’ve had a CCJ?

Although a mortgage application with CCJs can be daunting, here at First Thought, we have access to a range of those specialist lenders who are most likely to be able to help you. It can be difficult to determine who will look at your individual circumstances and who won’t, especially when all lenders have different criteria. Don’t give up hope, however, we’ve helped a number of people with CCJs to secure a competitive mortgage offer and our friendly team are here to help.

Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

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