A blemish on a potential borrower’s credit report doesn’t necessarily mean that their homeownership aspirations have to go on hold, but many people still think that this is the case. One of the most common of such credit blips is a County Court Judgment (CCJ).
So, how common are CCJs?
A County Court Judgement is issued if people fail to pay money that they owe and most other reasonable avenues to recover the money – letters, defaults, late payment notices – have been ignored and exhausted. Many mainstream lenders refuse to offer mortgages to people with an open CCJ, or ones that have occurred in the past three years. A satisfied court judgment – one which has been paid off, solved or settled – is looked on more favourably. A settled CCJ disappears from a borrower’s credit file after six years. And CCJ’s are on the rise.
According to the latest figures released by Registry Trust, the number of CCJs registered against consumers has risen year-on-year in Q3 2019, making these the highest amount of registered judgments against consumers in the third quarter since 2017.
Breaking this down, a total of 289,971 County Court judgments (CCJs) were registered against consumers in England and Wales in Q3 2019, with Registry Trust predicting that these levels are expected to be sustained. Claimants are taking out larger judgments in increasingly greater numbers with the total value of consumer CCJs increasing to £419.5million, a rise of 14 per cent from last year’s figures; at the same time the average value increased by 8 per cent to £1,447 compared to £1,336 in Q3 2018.
The fact that the number of CCJs is expected to continue to rise must be a cause for concern, a factor which underlines the importance and value attached to the financial advice process, especially when it comes to their mortgage requirements.
It can be also be difficult for intermediaries to easily quantify the number of mortgages available to borrowers. CCJs and other credit blips come in all shapes and sizes, making it difficult to chart and compare the deals on offer as they often don’t fit within the dimensions of a tick box criteria formula. Then there is the issue of intermediaries not knowing which lenders will service what level of credit history as they often deal with such borrowers on a case-by-case basis. This combination means that it’s more important than ever for intermediaries to fully understand what type of credit blips their clients have, how far away they are from the computer says no criteria of many high-street banks and how specialist lenders, such as Foundation Home Loans, can help.
So, if you’re looking to bolster your residential lending proposition with a lender who understands how credit blips are not the end of the mortgage world for certain borrowers, then why not speak to us today to find out how we can help.
