CCJ Vehicle Finance

What is a CCJ?

A CCJ, or County Court Judgement, is a type of court order that lenders can obtain through the court if you fail to repay an outstanding debt. Following a number of missed payments, the lender would have to issue a warning letter, and wait a period of time before proceeding with legal action. The court then has to agree with the lender that you owe the amount quoted and this may result in a CCJ against you.

Typically, the court would order that you repay the outstanding amount in instalments, which can be directly from your wages. But sometimes, even after the funds have been repaid, the CCJ will remain on your credit file. This is because it stays there for six years after being issued. It is nevertheless a good idea to repay the debt as soon as possible, as this will both reduce your total outstanding debt amount, and help rebuild your credit rating.

Will a CCJ Affect My Chances of Loan Approval?

Due to the fact that a CCJ will remain on your credit report for six years, even if you pay it off in that time, your ability to take out further credit is likely to be impacted. Do bear in mind though that lenders may be less concerned with older CCJs that have already been paid off than recent ones.

When it comes to vehicle finance, having one or more CCJ on your credit report may mean that some lenders would turn down your application. Lenders that do consider your application will often offer higher interest rates, when compared with the rates offered to people with good credit scores. It’s therefore important to compare a number of lenders, to see if you’re eligible for a better rate. Brokers like Vehicle Finance Today can help you do this! We’ll do all the hard work for you, comparing lenders in our panel and finding you a suitable vehicle finance provider.

Can I Get Vehicle Finance With a CCJ?

There are a number of car finance lenders who will offer loans to people with a CCJ on their credit file. In fact, some finance providers specialise in vehicle loans for bad credit, looking at your affordability alongside your credit score. This will include things like your income and expenditure, as well as your employment history.

Another thing to bear in mind when applying for vehicle finance is that it’s a type of secured loan. As the name suggests, with such loans, the loan is secured against a valuable asset – in the case of vehicle finance, this would be your vehicle. And because this means that there is less risk for the lender, secured loans are typically easier to access, even for people with a CCJ.

CCJs and My Credit Score

You may already have at least one CCJ on your credit file, and might therefore be concerned about getting approved for vehicle finance. However, there are a few ways you can lessen the impact of a CCJ when it comes to borrowing. For instance, you can speak to any of the UK’s three main credit reference agencies (Equifax, Experian and TransUnion) about how a CCJ can affect your credit rating. They may be able to offer information and guidance.

You should also contact these credit reference agencies if a CCJ has been on your credit report for longer than the stipulated six years. You can request that the CCJ is removed. You may furthermore be able to get a CCJ cancelled if you’re able to prove that it should not have been issued in the first place. It may be helpful to speak to a third party like the Citizens Advice Bureau before starting this process, as they’ll be able to provide impartial advice.

You may not realise that paying off a CCJ in full within the first month of it being issued will ensure that it’s removed from the public register, though it would still remain on your credit file and thus impact your rating. There are ways to improve your credit score though, even with a CCJ. For more details, you can check out our Bad Credit Vehicle Finance page.

How Do I Apply for Vehicle Finance With a CCJ?

One of the simplest ways to apply for vehicle finance, especially if you have bad credit, is to apply using a broker service. When you make an application through us, we’ll only undertake soft credit checks, which won’t be reported on your credit file. We’d then compare our panel of lenders, and do our best to put you in touch with a suitable vehicle finance provider.

Many of our lenders specialise in bad credit car loans, and may consider your application even if you have negative marks on your credit report, such as a CCJ. Apply today with no impact to your credit score!