If you don’t repay money you owe, the creditor can take court action. They can register a County Court Judgment (CCJ) against you – and this appears on your credit record.

This means that getting a CCJ can damage your credit rating. And this can affect your ability to borrow and may prevent you from renting, as well as causing other issues.

Not sure what effect getting a CCJ can have on your credit rating? Don’t worry – we’ll take you through what you need to know.

A CCJ and your credit rating

CCJs will appear on your credit report for six years from when the court first registers them. This means that anyone who checks your credit report during this time will be able to see this.

A CCJ can have a serious negative effect on your credit rating, as it shows you’ve not kept up with contractual repayments. This can mean you’re more likely to get turned down for credit, and it could even stop you from getting a mobile phone contract or a rental agreement.

If you get a CCJ but you pay it off within 30 days, the CCJ won’t show on your credit report at all. So, if you can afford to do this, make sure you pay it off in time.

If you can’t afford to clear your CCJ in the first 30 days but you can clear it in six years, you can get the credit reference agency who holds your credit report to mark your CCJ as ‘satisfied’.

Anyone who credit searches you can still see the satisfied CCJ but they might not treat it as negatively as if it was still outstanding. This depends on the individual lender or service though, as there’s no such thing as a credit blacklist.

Can you get a CCJ during a debt solution?

If you’re on a Debt Management Plan (DMP), your creditors can still apply for a CCJ against you. They might be less likely to do this though as you’ve agreed to pay something towards them.

We’ll always speak to your creditors for you and work with them to avoid legal action wherever possible. There’s no guarantee of this but the fact that you’re paying towards your debts might make your creditors treat you more favourably.

If you’re in an Individual Voluntary Arrangement (IVA), your creditors can’t apply for a CCJ against you. This is because it’s a legally binding solution. And if you have any CCJ debts when your IVA starts, you can add these into your IVA.

You can read more on what you need to know about CCJs with our helpful guide.