How Does A CCJ Affect Your Credit Rating?

It is important to understand how a CCJ affects your credit rating and how do lenders lenders find out about them.

A CCJ should automatically be registered with the Registry Trust. This happens by the court notifying the Registrar who will add it to its records. Credit reference companies such as Experian and Equifax, have access to the Register of CCJs so lenders who carry out credit checks using those services, will see the existence of the CCJ.

How Does A CCJ Affect Your Credit Rating?

Lenders making a search will be able to see when the CCJ was entered, by who and for how much. It will also show whether it has been paid or is still outstanding (see our page on certificates of cancellation and certificates of satisfaction for more on this).

When a lender sees a CCJ, it will affect its decision on whether to offer credit and if so, how much and on what terms. Generally, a CCJ is an indicator of poor finances and a lender will see this as a sign that you pose a greater risk of not paying, if it lends you money or provides credit.

A Basic Example – The Borrowing Friend

Put it this way, if you had a friend who asked you to lend him money and you knew that someone had already loaned him money but he had failed to pay it back, would you still be prepared to lend it to him? Probably not, as his history suggests he might not pay it back on time or at all.

If you had another friend who asked you to lend him money and you knew he always paid it back on time, you might be more prepared to lend it to him. His history suggests he will pay it back on time.

It is the same for lenders such as banks and credit card providers. They do their homework on who owes what to who, and how good the person seeking credit is at paying bills and debts off.

Check Your Credit Report

There are both free and paid ways to check your credit reference and the main sites are here:

Credit Karma (formerly called Noddle)