Choose Wisely guide to borrowing with a CCJ

Choose Wisely guide to borrowing with a CCJ
Written by Mark Grimley
Published on 5th July 2017
Updated on 20th August 2018
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Getting a loan when you have a CCJ in your credit history makes things a little more challenging, but it’s still possible. It is important to do your research and consider all the issues before taking on more credit. You also want to get the best deal possible for your financial circumstances. Choose Wisely has more information about CCJs, what they mean for your borrowing and what loans might be available to you. You can be as prepared as possible by taking a few simple steps.

Get prepared and do your own checks

Check your credit file yourself. You need to know your credit score so you can apply for the right loans. You can also take this opportunity to make sure all the information on your credit report is accurate and up-to-date. This includes checking addresses and looking for any entries that might be slow to have been updated, such as credit you have recently paid off. You should also check that the information held about your CCJ is correct. If the CCJ was satisfied then that should be shown as it will improve your chances for a loan over an unsatisfied one.

Consider your guarantee

Most lenders will look for CCJ loans to come with security or a guarantor. This is another step you will need to think about before you apply. Borrowers with a CCJ on file are judged by lenders to be of higher risk. The lender does not want to be pursuing people for money and so CCJ loans sometimes require security. This could be using your car or a guarantor who will take responsibility for the loan if you cannot repay it. These are big decisions and worth considering carefully. Your belongings could be forfeited if you cannot keep up with the loan.

Know what to apply for

A CCJ will disqualify you from applying for many loans, especially the more traditional high street banks. As applications for credit will show up on your credit report you want to keep those applications to a minimum, so try to only apply for loans where you match their criteria. There are an increasing number of loans especially for people with poor credit history or CCJs. These lenders are aware of the risks involved and may offer loans with high-interest rates.

Shop around for the best possible rate

Your choices may be limited but they are varied, and it is well worth doing your research and comparing rates. When the rates are as high as these are likely to be, then a little difference in the rate will make a big difference to your monthly repayments and the overall amount due. Choose Wisely can help you compare different CCJ loan providers. You should look for more concrete figures, such as what the monthly instalments will be, and how much will be repaid in total. These numbers are the practical side of the APR and it is important to work them out in advance to be able to budget effectively.

Find Loans

Use the Choose Wisely Eligibility Checker to find a suitable lender in just a few minutes, without impacting your credit score.

Plan carefully to stay on track with your loan

It’s important if you have a poor credit history to avoid getting into difficulty with any new loans. You should consider the loan very carefully: what you need it for, if there are any alternatives, how you will budget for the repayments and how you will make sure you keep on track. This might include keeping track of your expenses, measuring them against your income and making some cuts if necessary. You need to have enough cash each month to meet your loan repayments and deal with whatever crops up during the month too.

What to do if things start to go wrong

Circumstances change and because you have had financial difficulties before, you will be even more motivated to get things right this time. You can get budgeting help, debt counselling and free advice from organisations such as National Debtline and Citizens Advice Bureau. Don’t wait until you are having difficulties to reach out for help. You should also be open with your guarantor if you are using one. It is in their best interests that you can pay off your loan and they will want to know how you plan to handle anything that might come up.

Find loans for bad credit

Have bad credit? Have a look at the full range of loans available and compare your options using a Choose Wisely comparison table.

Mark Grimley
Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.