A guide to CCJs and your credit report
A poor credit rating can make leasing a car extremely difficult. If you miss rentals or have defaults, CCJs or IVAs in your credit file, many companies will refuse to supply car finance. This can be very frustrating, especially if you can easily afford the lease rentals.
But the good news is, it is possible to rebuild your credit status and make yourself more attractive to leasing companies. Understanding your credit file is the first step in getting back on your financial feet.
Many people struggle with poor credit through no fault of their own and find that CCJs negatively impact their ability to secure credit. But what are CCJs? And how do they affect your credit rating?
What is a County Court Judgment (CCJ)?
If you are unable to keep up with debt or lease rentals, a creditor may take further action to get their money or assets back. They may choose to sell the debt to a debt collection agency, reclaim assets such as a lease car, or take the matter to court. If they choose the latter, the court will issue a County Court Judgment.
When a court issues a CCJ, they send you a CCJ claim form. This outlines the amount you owe and how and when you should settle the rental. You have 14 days to respond and should contact your lender as soon as possible to agree on a repayment plan. Along with the claim form, you will receive an admission form, which allows you to explain your side of the story.
“CCJs remain on your credit file for six years and can result in a poor credit rating.”
What should I do if I receive a CCJ?
Respond to the CCJ via the admission form. This allows the court to consider your circumstances and set a reasonable and affordable rental plan. If you ignore the CCJ, the court will rule without your input. You may be issued with a ‘judgment forthwith’, which determines that you pay the debt in full, or you may receive a ‘judgment of instalments’, which allows you to make repayments over a set period.
As with any other entries, a CCJ remains on your credit history for six years, unless you can pay the full amount within 30 days. If you do so, the CCJ will be removed from your file. If you pay the debt after the 30 days, the CCJ will remain on your record and be marked as ‘satisfied’.
Can I remove a CCJ from my record?
If you feel that the CCJ is unfair or incorrect, you can fight the judgment and ask for it to be ‘set aside’. Write to your lender to appeal the entry and ask for them to remove or amend it. You need to give details as to why you feel this is necessary, e.g. this debt did not belong to you, or it was issued before you missed three months of rentals. If the lender does not respond favourably, you can appeal to the relevant Ombudsman or the Information Commissioner’s Office (ICO).
Although it is not possible to remove a justifiable CCJ, you can ask for a note to be added to explain why the problem arose. This note will not affect your credit score but it does give lenders an idea of why you have a poor credit rating and the circumstances surrounding it.
“Eureka Leasing may be able to offer you a great car lease deal even if you have a poor credit rating.”
How do CCJs affect my car leasing application?
A CCJ in your account will negatively affect your ability to secure a car lease. You may find that many car leasing companies refuse your application due to concerns that you will struggle to meet rentals. However, CCJs only remain on your credit file for six years, so it is possible to rebuild your credit rating over time.
If you have poor credit and are refused car finance, contact Eureka to see how we can help. We underwrite our own deals and personally provide the credit, to ensure you receive a personalised service every time.