BACK

Expert Q&A

In U.K., unheeded court order can clobber your credit

Summary

A U.K. reader learns that a county court judgment that wasn’t repaid within one month can tarnish his credit for years

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Question for the CreditCards.com expert

Dear Credit Score Report,
Please help! I feel I am a victim of circumstance. I have had multiple sclerosis for many years and always had an excellent credit score until now. Following a relapse of MS, I have now gone into progressive MS and lost my job and home. I have received a pension and payout from my employer which took 12 months to resolve. During this time, I was with a debt management company and have now settled all outstanding finances. Due to this, my credit score is bad. Is there anything I can do to correct this torture of not being allowed credit? A CCJ was issued, but was paid and settled prior to court hearing. — Ian

Answer for the CreditCards.com expert

Hey Ian,
Unfortunately, you are among many who have suffered credit score damage as a result of poor health. And by mentioning a county court judgment (CCJ), I presume you live in the United Kingdom, and while your country’s credit scoring system means the damage may linger for years, experts say you can still work to rebuild your credit.

In Britain, a creditor can take action against you through a county court in an attempt to be repaid. As the borrower, you receive a letter informing you that a CCJ has been issued and that you owe a creditor money. By paying the debt in full within a month, you can avoid a judgment against you and any long-term hit to your credit. If you take longer than a month to pay, you get a major black mark against your credit.

Your letter says that you paid what was owed before you had to go to court, but it doesn’t specify whether you did so within a month’s time. That detail can mean the difference between still qualifying for loans and being denied any new credit for years.

Although I’ve attended football (not soccer!) matches in London and Norwich, eaten Aero chocolate bars and enjoyed watching old episodes of Alan Partridge, there’s still a lot about your country I’m no expert on — including the credit scoring system. However, I do have access to people who are more knowledgeable. “A county court judgment is a serious matter there and has a very negative impact on a person’s credit score,” says David Jones, president of the U.S.-based Association of Independent Consumer Credit Counseling Agencies (AICCCA). However, if you pay the debt within one month after receiving the CCJ, you can apply to have the entry changed to show that you’ve paid (or “satisfied”) the debt. Jones says although there are legal judgments regarding past debts handed down in the United States, “there is nothing like a CCJ in U.S. law in the sense that such a serious and lengthy hit to a debtor’s credit score results,” he says.

If you don’t pay the debt in that one-month period, the “CCJ usually makes it impossible for a consumer to get any form of credit for at least six years,” Jones says. Assuming you didn’t pay the debt quickly enough, that likely explains your difficulty securing new credit. But I still want to commend you: You’ve done all you could when faced with a tough situation. Now, you may need to wait for your score to recover. In the meantime, you must apply good borrowing habits to encourage that process.

To begin, contact the debt management company to see if they can offer any help in rebuilding your credit. “Although AICCCA has no members in Great Britain, Ian could also contact a counselor from our member Money Management International, which does has an affiliate in the U.K.,” Jones says.

Since you say you ultimately paid your debt — even though it may have taken longer than a month — there may be some lenders willing to work with you. For example, you may be able to qualify for a prepaid card or debit card from your bank, Jones says. He also says that you may be able to get a store brand credit card that reports your on-time payments and helps your credit score to recover. There’s no guarantee that you’d qualify for any of these, but since they are typically not as hard to qualify for as a standard credit card, it may be worth a try. Meanwhile, don’t miss any payments to businesses or creditors. “He should make sure that all his bills (rent, car loan, etc.) are absolutely paid on time,” Jones says in an email.

Otherwise, you’ll just need to be patient as your credit score recovers from these challenging circumstances. “It’s going to take time and diligence and Ian will be paying some higher interest on whatever credit he is able to get for awhile,” Jones says.

Good luck!

–Jeremy

See related:Will there be a global credit score someday?How credit scoring differs around the world

What’s up next?

In Expert Q&A

7 ways to protect your credit rating during unemployment

Losing your job is bad enough; take these steps to minimize the damage and prevent trouble from infiltrating another part of your financial life

Published: October 17, 2011

See more stories
Credit Card Rate Report Updated: March 26th, 2019
Business
15.24%
Airline
17.50%
Reward
17.55%
Cash Back
17.58%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.