One of the biggest reasons people get refused car finance with lenders is that they have a CCJ on their credit file. We constantly remind customers that the actual credit score on your file doesnt really matter. Its simply an indicator regarding your credit record, and having a low credit score does not stop some of our customers from being accepted for finance.
What is a CCJ
A CCJ is a county court judgement , they occur when you have not paid off a loan or credit card and gone into DEFAULT. This means you have not paid back what you owe. We can tell you straight from the start that having a CCJ on your credit record is not a good flag and it depends on what type of CCJ you have on their. The creditor has decided to try and get their money back from you by taking you to court and placing a judgement on you which formally means you owe the monies.
The Worst Kind of CCJ
There are two types of CCJ, a Settled CCJ and an unsettled CCJ. In laymans terms imagine a friend came to you to borrow £20. In the past you had lent him money and he had forgot to pay you back, however after sometime he settled the debt and now he is coming back for more. You are more likley to give him another £20, because in the past he actually paid you back. Which is in reality a good sign (He pays off his debts). Now imagine a friend who wants £20 and in the past he borrowed money from you and despite you asking several times, he never paid you back.
You have to ask yourself which friend would you rather lend money too? The one who paid you back eventually or the one who never paid you back. Car Finance works in a very similar way when it comes to CCJs. If you have a CCJ but have settled it, then the car finance lenders are more likely to lend you money than if you have an unsettled CCJ which you have never paid off.
What can I do if I have an unsettled CCJ
If you have an unsettled CCJ on your file, it is advisable to clear it off, and settle the debt, by doing this the CCJ becomes a Settled CCJ and that kind of CCJ is more favourable on your credit file. You can download apps ike credit karma to see all of your eisting debt and CCJs against your name. Once settled you may have to wait a month or two for the CCJ to appear as settled, but once you get to that stage, its worth reapplying with us to see if you can get a better rate or get accepted for car finance.