Bad Credit Mortgage with CCJs

Getting into debt causes a lot of stress and can have a long-term impact on your financial situation. If you have a County Court Judgement on your credit file, it helps to understand how that could affect you getting a mortgage. 

What is bad credit?

Everyone who has a bank account and financial products will have a credit file, which tells financial providers about how you behave with your money and how reliable you might be as a customer.

‘Bad credit’ is a term that describes any situation that means you have a low credit score. You could end up with bad credit from any of the following – or a combination of them:

• Late payments on credit agreements and even utility bills
• Missed mortgage payments
• Defaults – falling behind with a loan or other borrowing
• County Court Judgements (CCJs)
• Individual Voluntary Arrangements (IVAs)
• Debt management schemes
• Repossessions
• Bankruptcy
• Payday loans – ever taking out a payday loan affects your credit score
• No credit history – you have never borrowed money

What is a CCJ?

A County Court Judgement (CCJ) is a court order issued against you when you don’t pay a debt you owe. You will receive various written warnings from your lender before the County Court gets involved. However, some of the most common CCJs are from unpaid parking fines.

The CCJ may be cancelled if you pay back the money you owe within 30 days. If not, the CCJ will appear on your credit record for six years. It will be much harder for you to borrow money in the future as only a small number of financial lenders take on customers with CCJs.

Will anyone lend to me with a CCJ?

The short answer is yes, we can help people that have CCJs showing on their credit report get a mortgage. However, it is often easier to approach lenders if the CCJ was a couple of years ago and you have had no further credit issues since then, and ideally the CCJ is now satisfied. In that situation you are likely to be offered better mortgage rates.

Your credit report is less important to a lender if you have a large cash deposit – 25% of the property value, for example. A joint mortgage with someone who has a good credit history could also help you get a mortgage.

The size of your CCJ is relevant too, especially if it’s recent. A CCJ of £1,000+ in the past 12 months to two years can be a big red flag to some lenders. Meanwhile, a smaller debt, settled years ago, may not be of too much concern.

We have access to mortgage lenders that do not take any defaults or CCJs linked to mobile phone contracts or utility bills into consideration. This can be very useful.

How long will a CCJ stay on my credit file?

All credit issues stay on your record for six years, after which they disappear. Your chance of getting a mortgage approved increases as more time passes since any adverse credit events happened. A very recent, unsatisfied CCJ will deter most lenders, that said, every lender will have unique requirements when it comes to bad credit.

How do I improve my credit score if I have a CCJ?

To improve a poor credit score, first confirm you’re on the electoral roll, which is a basic requirement for credit and then check your credit score online to see if it’s accurate.

If you are in a debt management plan, stick to it closely. Ensure you are always punctual with any other payments due – on your CCJ, credit cards, utility bills and phone, for example.

Avoid applying for new finance if you can – each time you apply for a loan or payment plan it shows on your record. Numerous applications in a short space of time is a bad sign to lenders.

First Time Buyers / Remortgages – will the process be different if I have a CCJ?

Lenders are more interested in the specifics of your individual situation than whether you’re a First Time Buyer or a Remortgage customer. The lenders that are most willing to take on people with prior debt issues are usually specialists rather than high street providers, and will tailor the mortgage deal to you.

How can Fifty Nine Financial help me?

We have lots of experience in helping people with credit issues in securing a mortgage. We advise on all kinds of mortgage from fixed rate and variable residential deals to Buy to Let mortgages and more.

Our advisors will spend time getting to know you and your credit situation to find the most suitable lenders for you. We make sure that the repayments on your mortgage will be affordable before recommending any products – the last thing you need is for your debt situation to get worse.

Our team will support you at every stage, recommending products and helping you apply for a mortgage, and chasing things up right through to completion.

Take the stress out of finding a mortgage deal with bad credit, contact us to see if we can help you.

Your home may be repossessed if you do not keep up repayments on your mortgage.