County Court Judgement (CCJ)

Having a County Court Judgement (CCJ) against you can make taking out credit more difficult, from a personal loan to a mortgage. Perhaps you assume it’s not possible to take out a car finance loan if you have a CCJ on your credit file. Thankfully, this is not always the case - certain lenders will consider your application even if you do have a CCJ, and there are some finance providers who specialise in such loans.

What is a County Court Judgement (CCJ)?

If you fail to repay the debts you owe, the lender may have the option to take out a CCJ against you. While more common with larger loans, even a payday lender can choose to issue you with a County Court Judgement. Before they do so though, the finance provider needs to undertake the following:

  • The lender will issue you with a warning letter, which will include the total amount you owe
  • If the lender doesn’t hear from you, or you’re unable to pay, legal action will begin
  • A judgement will be passed - if the court agrees with the amount owed they’ll confirm these details and inform you how you’ll need to repay the funds

A CCJ will remain on your credit report for six years after it’s been issued, along with the CCJ register. While you may be able to get the CCJ removed from the public register if you’re able to pay off the full amount within a month of the CCJ being issued, you can’t remove it from your credit file. It is a good idea to pay off the debt as soon as possible though, as not only will this reduce your total outstanding debt, resolving the CCJ will also help you start rebuilding your credit score. 

How Do CCJs Affect Car Finance Applications? 

As a CCJ will stay on your credit file for six years, regardless of when you pay it off, it can impact your ability to borrow for some time. Although an older CCJ that has been paid off looks better than a recent one, having a CCJ on your credit report can lower your score and therefore your chances of taking out a loan. 

In terms of car finance, having a poor credit score may mean certain lenders are not willing to lend to you, and those who do consider your application could charge higher interest rates than if you had a better score. But a CCJ doesn’t necessarily mean you’re not eligible for a car loan. 

Can I Take Out Car Finance With a CCJ?

As mentioned above, some lenders do specialise in car loans for people with bad credit, which includes having a CCJ. So securing car finance is possible even if you have a CCJ, and we can help put you in touch with a suitable lender.

It’s good to note that as car finance is a secured loan, you may find it easier to get approved than with an unsecured loan, even with a poor credit rating. This is because your vehicle acts as collateral against the value of the loan, so there is less risk for the lender. Do remember though that your car could be repossessed should you fail to keep to your instalments. 

The Impact of a CCJ on Your Credit Score

If you do already have a CCJ reported on your credit file, there are ways in which you can lessen the impact. We’ve listed a few tips below to help you get started:

  • Paying in full within the first month of a CCJ being issued will mean it will be removed from the public CCJ register 
  • Speak to one of the three credit reference agencies (Equifax, Experian or TransUnion) about how your CCJ is impacting your credit file, and they may be able to offer advice
  • If you’re confident that the CCJ should not have been issued and can prove this in court, you can request that it be cancelled
  • Should a CCJ be on your credit report for more than the stipulated six years, you can contact the credit reference agencies to ensure it’s removed

You can furthermore minimise the impact of a CCJ by working to improve your overall credit rating. For advice on boosting your credit score, you can check out our Bad Credit Explained page. 

How to Apply for a Car Loan With a CCJ

If you have a CCJ, or any type of bad credit, one of the simplest ways to get car finance is to apply through a broker. When you make an application with us, we only perform soft credit checks, which don’t impact your credit rating. We’ll then search our panel of lenders to try and find a finance provider who can help. 

Many of our lenders will consider your application even if you do have a poor credit history, as they’ll also take other factors into account when making a loan decision. These include things like your income and expenditure, as well as your employment history. 

Another thing to bear in mind when using a broker service is that you shouldn’t have as many hard checks on your credit report - too many in a short space of time can negatively affect your credit score. If you were to make multiple applications with car finance lenders, each one would undertake a full credit check. But with a broker, once you’re matched with a lender, you’ll only have one hard search reported. You can additionally check your eligibility using our handy tool below, without any impact on your credit score!