CCJs

CCJs

CCJs (or county court judgements) help in assessing the credit worthiness of individuals and businesses. Now banks, retailers, mail-order companies and loan companies use CCJs together with other data to evaluate credit applications.

Now most businesses refer to CCJs before giving credit to customers. CCJs have become important for consumers too. A recent study showed that an increasing number of consumers are using debt to meet short-term needs. Consumers now understand that a good credit score increases the possibility of raising money from lenders.

CCJ's refer to the judgment handed out by County Courts. The County Courts resolve civil matters such as debt repayment; personal injury; breach of contract concerning goods or property; family issues and housing disputes.

Recording CCJs

The County Court judgments are recorded on the Register of County Court Judgments. The registration of County Court judgments dates back to 1852 in England and Wales. Since 1986, a separate entity called Registry Trust Limited maintains the Register of County Court Judgments, which contains details of money judgment and administration orders besides child support agency liability orders.

The Registry Trust serves as a critical link between courts and the public, credit reference agencies and other commercial buyers. The credit reference agencies and other commercial buyers add value to CCJs and sell them to lenders, mail-order companies and other businesses. The credit reference agencies play a valuable role in the credit process.

These agencies append additional information to CCJs to form a credit reference file. A typical credit reference file contains information relating to electoral rolls, bankruptcy, individual voluntary arrangement, administration order and CCJs. The electoral rolls, for instance, help in assessing if an applicant for credit has stated correct residential address in his application or not. Usually, the credit reference file also incorporates payment history procured from lenders.

Often the credit reference file becomes a part of a larger system. For instance, the lenders such as banks feed information from the credit reference file into a proprietary credit scoring model. Banks base their lending decisions on the credit score provided by the model.

The credit scoring system of Abbey Bank, for example, takes into account information from the applicant; own database, other agencies and credit reference agencies. A good credit score does not necessarily mean that a bank will lend to a consumer. A lot depends on the business priorities of the bank as well. Although other factors count are taken into account, CCJs are the most critical factor in the credit scoring system.

Clearing CCJs

The key issue relating to CCJs is registration; that is appearing on the Register of County Court Judgments. If an individual or a business settles the debt within a month of the judgment then the registration can be cancelled. A County Court judgment will also be set aside if it was 'incorrectly granted.' Otherwise, a CCJ will stay on the register for six years from the date of the judgment. If the debt is repaid after say two months, then the consumer can have the judgment marked 'satisfied' in the Register.

The appearance on a register of CCJs does not necessarily end chances of getting credit, but nor does it inspire confidence in lenders. Not surprisingly, some credit repair companies offer ways of cleaning up credit reference files, but history shows that nothing is as effective as prompt payment of dues.

CCJs have become invaluable as risk management tools that save a lot of time and trouble for lenders.

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