A County Court Judgement (CCJ) can often be a barrier to obtaining credit, but isn't necessarily always the case. Certain types of credit may still be open to you, even if you have a CCJ against your name.
What is a CCJ?
CCJ stands for County Court Judgement and is given by a county court. If a person fails to repay a debt, the company or person they owe money to can go to the court to try and get it back. If the court agrees you have an outstanding debt, it will issue an order saying you have to repay it and tell you how to do this. A CCJ has a negative effect on your credit rating because it suggests you’ve not repaid what you’ve borrowed.
Can I still get credit with a CCJ?
Having a CCJ on your credit file could exclude you from getting credit with mainstream lenders such as high street banks. But some other types of lenders will still consider your application. So, yes you may be able to get credit even if you have a CCJ.
Where can I get credit?
There are lenders who will give you credit even if you have a CCJ. These include doorstep loan companies like Provident, also includes online lenders offering short-term loans and low balance credit cards. Another type of lender you may be able to obtain credit from are guarantor loan companies.
Let's look at those options in a little more detail.
There are many online lenders offering this type of credit. As the name suggests, a short-term loan is repaid over a brief period of time - anything from one month to one year. Typically new customers are able to apply for loans of between £100 and £1,000 (subject to affordability), though some lenders will loan you more.
An advantage of this type of loan is that if approved, you'll often receive the money within an hour. The downside is the high interest you pay, some lenders also charge extra fees which can increase the cost of the loan.
This is different from usual forms of credit as a third party guarantees the loan on your behalf. Basically this means another person, usually a relative, will promise to repay the loan if you're unable to do so.
The advantages of a guarantor loan are you can borrow larger sums and have longer to repay the money, often up to five years. The disadvantages are of course you have to find a guarantor and if you have difficulty in repaying the loan the guarantor must do so instead, which can put a strain on a relationship.
Low balance credit cards
There are many lenders offering this type of credit card. Typically an opening credit limit will be between £125 and £250.
The repayments will vary depending on your balance so it's difficult to work out how much interest you'll pay. Unlike a fixed cost loan your repayments will vary month to month which makes it harder to budget. As credit cards are 'revolving credit' it's sometimes difficult to pay them off.
Whilst doorstep lenders look at your credit score, it's not the only thing they look at. Doorstep lenders take the time to get to know you face to face. If you’re accepted in principle, a company representative will visit you in your home to discuss your needs and if approved, give you a loan.
During this face to face meeting, the company representative will usually discuss your circumstances and help you complete an affordability assessment. This determines whether you can afford the repayments on your loan. If accepted you'll receive the money you need in cash.
The advantages of a doorstep loan are the face to face service and being able to make repayments in cash and in person. A disadvantage is they take longer to arrange than an online loan.
All the above types of finance may help you increase your credit rating if you make your repayments on time and in full. While there is no guarantee of approval all the credit options we've discussed may be open to you even if you have a CCJ.