Getting a mortgage with a County Court Judgement (CCJ) can feel like an uphill battle. Lenders use your credit history to judge whether you are a reliable borrower and a CCJ is one of the most significant indications of previous financial difficulty. But while it does make things harder, it does not necessarily make homeownership impossible.
This article explores what a CCJ is, how it is likely to affect your ability to get a mortgage with bad credit, what steps you can take to improve your chances and what types of bad credit mortgage products may be available to you.
What is a CCJ?
A County Court Judgement (CCJ) is a type of court order that can be issued if you fail to repay money you owe. A creditor, such as a credit card company or utility provider, can apply to the court to claim money owed and, if the claim succeeds, the court issues a judgement against you.
Key details about CCJs:
- They stay on your credit record for six years. Even if you pay off the debt, the CCJ is visible to lenders until it expires.
- If you pay within one month, it can be removed. Paying off the full amount within 30 days of judgement means it will not appear on your credit file.
- If you pay after one month, it is marked as ‘satisfied.’ This is better than leaving it unpaid, but it will still show on your file.
- Because CCJs are clear evidence of missed payments, most mainstream lenders see them as high-risk, which is why getting a mortgage with bad credit is not straightforward.
Can You Get a Mortgage with a CCJ?
Yes, it is possible, but not with every lender. A CCJ significantly reduces your options with high street banks, which usually prefer applicants with a clean credit history. However, there are specialist lenders who design mortgage loans for bad credit specifically, including for people with CCJs, defaults or other adverse credit events.
Your chances of approval depend on factors like:
- The size and age of the CCJ: Older and smaller judgements are viewed less negatively than recent or larger ones.
- Whether the CCJ has been satisfied: Paid judgements (even if still visible) carry less risk.
- How many CCJs you have: One small CCJ is easier to explain to a lender than several.
- Your overall financial picture: Income, expenditure, deposit size and other debts all factor into whether lenders will approve you.
What Lenders Look At
Specialist lenders are more flexible but will still review the following:
- Timing of the CCJ: Judgements in the last 12 months are the most damaging, while those older than two years carry less weight.
- Size of the CCJ: Judgements under £2,000 are more acceptable than larger ones.
- Deposit size: Having a larger deposit improves your chances, as it reduces the lender’s risk.
- Other credit behaviour: If you have had no missed payments since the CCJ, this can demonstrate improved financial management.
Improving Your Chances of Getting a Mortgage with Bad Credit
While a CCJ limits your options, there are steps you can take to make yourself a more attractive applicant:
- Wait if you can: The older the CCJ, the less impact it has. Some lenders only consider CCJs over two years old.
- Pay off the CCJ: Even if it remains on your file, marking it ‘satisfied’ is more favourable.
- Save for a larger deposit: A bigger deposit gives you more credibility with lenders.
- Work with a specialist broker: Brokers with access to lenders who provide mortgage loans for bad credit can help you find products that suit your circumstances.
- Keep other finances in order: Paying bills on time, reducing debts and avoiding new credit can improve your overall credit profile.
Types of Mortgages Available
If you have a CCJ, you are more likely to need a bad credit mortgage from a specialist lender. These are tailored for people who do not meet the strict criteria of high street banks.
Features of bad credit mortgages may include:
- Higher interest rates compared to standard products.
- Requirement for larger deposits (15-25%)
- Stricter affordability checks.
While these products are more expensive, they can provide a vital bridge for those who would otherwise be excluded from the housing market. Over time, with an improved credit history, you may be able to remortgage to a cheaper mainstream mortgage deal.
Risks of Applying for a Mortgage with a CCJ
Applying for multiple mortgages and being rejected can further damage your credit score. For this reason, it is often best to consult a specialist mortgage broker before submitting applications. They can identify which lenders are more likely to accept you.
It is also important to weigh the long-term costs. A bad credit mortgage may help you buy a property, but it can cost more in interest. Consider whether waiting until your credit profile improves could be the smarter choice.
Conclusion
A CCJ makes it more difficult to secure a mortgage, but it does not close the door entirely. While mainstream banks are unlikely to approve you, specialist lenders offering mortgage loans for bad credit can provide solutions, especially if the CCJ is older and satisfied, and you have a reasonable deposit.
Working with a broker and managing your finances carefully will increase your chances of success. For some, the right bad credit mortgage can be the first step toward homeownership and, eventually, a better financial footing.
FAQs
Q. What is a CCJ and how long does it stay on my record?
A. A County Court Judgement is a legal order issued if you do not repay money owed. It stays on your credit record for six years even if you pay it off.
Q. Can I get a mortgage with bad credit if I have a CCJ?
A. Yes, though it is unlikely with a high street bank. Specialist lenders who offer mortgage loans for bad credit may consider your application, however, particularly if the CCJ is older or satisfied.
Q. What is a bad credit mortgage?
A. A bad credit mortgage is designed for people with adverse credit histories, such as CCJs, defaults or missed payments. These products usually carry higher interest rates and require larger deposits.
Q. Does paying off a CCJ help my mortgage chances?
A. Yes, a satisfied CCJ shows lenders you have taken responsibility and settled the debt. While it will still appear on your credit file, it is viewed more favourably than an unpaid one.
Q. How much deposit do I need for a mortgage with bad credit?
A. Deposits of 15-25% are often required. The larger your deposit, the better your chances of being approved for a mortgage.
Q. Should I wait until my CCJ drops off my record?
A. Waiting can improve your options and help you qualify for better rates, but if you are looking to buy sooner, a specialist bad credit mortgage may be the better option.
Q. Do multiple CCJs stop me from getting a mortgage?
A. Multiple or recent CCJs make it more difficult, but not impossible. Lenders will look at the dates, amounts and whether they have been satisfied.
Q. Will applying for mortgages harm my credit score?
A. Yes, if you make multiple unsuccessful applications, it can reduce your credit score. This is why targeted applications via a broker are advisable.
Q. Can I remortgage later to a better deal?
A. Yes, once your credit improves and your CCJ ages or expires, you may qualify for standard mortgage products with lower interest rates.
Q. Are mortgage loans for bad credit more expensive?
A. Yes, they usually carry higher rates and fees due to the increased risk from a lender’s perspective. However, they can still provide a path to homeownership for those with a CCJ.
Additional Sources:
https://mortgagekey.co.uk/guides/getting-a-mortgage-with-a-ccj
https://clickmortgage.uk/mortgages-with-ccj-and-defaults
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