Credit Score Basics > Can you get a loan with a CCJ?

Can you get a loan with a CCJ?

Wollit Team3 minute read · Updated 14th October 2024

CCJ stands for County Court Judgement, a court order that a creditor can issue as a last resort if you don’t repay your debt.

A CCJ can be tough because it stays on your credit report for six years. During this time, it can really damage your ability to get loans. Every lender can see that you failed to pay back your last one.

Still, it’s not impossible to borrow money even with a CCJ. Some lenders actually specialise in helping those with a bad credit record.

Can I get a loan if I have a CCJ?

In short, yes, but not from a “high street bank”. You’re just too risky to lend to. There are other lenders who might consider your application, though.

However, even in this case, APRs for CCJ loans can be very high: from 10% to 80% per year, and for some loans, as high as 600% per year.

So, unfortunately, there are no low interest unsecured loan options if you have a CCJ.

To give you an idea of how high these APRs can go, here’s a quote from Optimise Finance, a lender specialising in bad credit loans:

“Representative example:

Borrow £700 for 6 months.
1st monthly repayment of £168.45, 4 monthly repayments of £224.60, last monthly repayment of £112.20. Total repayment of £1,179.05.
Interest Rate p.a. (fixed) 185.39%
Representative APR 611.74%.”

While the interest rate is already very high, the APR is almost three times higher because of the additional fees that you’ll need to pay. So keep in mind that the APR is the “real cost” of debt.

Despite the higher APR, though, a loan like this could help you rebuild your credit score, as long as you repay it on time.

How can I qualify for a CCJ loan?

First, you have to meet some basic criteria:

Over 18 years of age;
Full-time UK resident;
Working in the UK and earning a minimum of £500 per month;
Valid UK debit account, mobile phone, and email address;
Able to afford monthly repayments;
And most importantly: your CCJ must be satisfied or in the process of being satisfied (paid off).

But that's just the basic eligibility. Your actual chances of getting a loan will depend on a few other things.

First, how long has passed since your CCJ was registered. An older CCJ will carry less weight. Ideally you should wait until the CCJ is gone from your credit report before applying for a loan. This way you'll have better chances of getting approved, plus you'll be asked to pay a lower interest rate.

Second, your credit history besides the CCJ. It's a good idea to use a tool like Wollit or some other credit builder, which will report your monthly plan payments as well as your rent payments to the three credit agencies – so you can show the lenders that you're a responsible borrower.

What kinds of loans can I get with a CCJ?

The amount you can borrow if you have a CCJ will likely be low, usually between £100 and £1,000. You’ll also have to pay back what you’ve borrowed over a short period – usually 12 months – and, like we mentioned above, pay exorbitant APRs.

Do I need a guarantor for a CCJ loan?

Not every lender will ask you for a guarantor, but of course, it helps.

Having a guarantor involves having an extra person you know, ideally with good credit, co-sign the loan agreement. This gives the lender a lot of security that their loan will be paid back because now they have an extra person to ask. In fact, most CCJ loans will require you to own your home or provide a guarantor, reducing the lender’s risk.

The main advantage is that you can usually borrow more significant amounts and have longer to repay the loan, typically up to five years.

This is not a risk-free option, though.

Guarantor loans tend to still have higher interest rates than standard loans. Plus, if you cannot repay your loan, your guarantor must do it for you, or risk facing legal proceedings themselves.

How about getting a mortgage with a CCJ?

Technically, you can. That doesn't mean it's easy.

Here are some factors that influence your chances of getting a loan with a CCJ:

How recently the CCJ was registered. Usually, the older it is, the more chance you have of success.
If the CCJ has been marked as "satisfied", you paid your debt. Some lenders prefer to have at least 12 months from the settlement, but others may be more flexible.
The size of the mortgage. A CCJ is technically an unpaid loan, and lenders will have to consider if you can afford making both the CCJ and the mortgage payments.
How many CCJs do you have? Obviously, more than one can be an issue, making lenders think you have a history of late or missed payments.
How much can you afford to put down? The more recent the CCJ, the higher the amount of deposit you might be asked to contribute.

What should I do first?

Applying for a loan when you have a CCJ is in many ways the same as applying for a standard loan.

But something you should always remember to do in this case is: always use an eligibility checker before you go ahead and apply for a CCJ loan.

That's because an eligibility checker will only perform a soft credit check (which is only visible to you). If you decide to apply for a loan with a lender, they will run a hard credit check (which is visible to everyone else). Failing a hard check will hurt your credit score even more.

It’s also a good idea to try to repair and improve your credit score, and using a credit builder tool like Wollit is an excellent first step.