When you are looking to apply for HP finance, your chances of approval often depend on your credit score. A good credit score can help secure better finance terms, lower interest rates, and higher borrowing limits.
Having a CCJ (County Court Judgment) on your credit file doesn’t mean you’ll automatically be declined for finance, but it might mean the terms offered are less favourable compared to someone with a good or excellent credit profile.
What is a CCJ?
A CCJ, or County Court Judgment, is issued when you fail to keep up with repayments on a credit or financial agreement. Before a CCJ is granted, creditors will typically have attempted to resolve the outstanding debt directly with you before submitting a claim to the courts to recover the money owed.
If you don’t respond to your creditor’s claim or settle the debt, the court may grant the creditor permission to issue a CCJ against you. This allows the creditor to take further enforcement action to recover the debt.
Once a CCJ is issued, you’ll have 28 days to settle the judgment balance. If you pay the full amount within this timeframe, the CCJ can be removed from your credit file. If not, the CCJ will remain on your file for up to six years, impacting your credit score and your ability to obtain credit in the future.
Will a CCJ stop me from getting car finance?
Each finance lender has its own criteria for approving customers. Some lenders specialise in poor credit finance and are more accommodating to those with poorer credit scores, while others only provide finance to customers with good to excellent credit.
It is possible to get car finance with a CCJ, but you may be offered a higher interest rate because lenders view you as a higher risk. Before committing to a car finance agreement, make sure to research and compare the rates available to you.
Can I get car finance with bad credit and a CCJ?
If your credit score is poor due to several defaults, missed payments, or a CCJ, securing car finance may be more challenging. You may need to explore alternative options or take steps to improve your credit score to increase your chances of approval in the future.
If you’ve been declined for finance before, you can read our guide, what to do if you’ve been refused car finance for helpful tips and advice.
Is a satisfied CCJ better for car finance?
Having a CCJ on your credit file, whether satisfied or not, isn’t ideal for improving your credit score. However, some lenders view a satisfied CCJ more positively than an unsatisfied one.
A satisfied CCJ shows that, although the creditor had to take legal action to recover the debt, you made the effort to repay what you owed. This can demonstrate your willingness to resolve financial issues, which may improve your chances of approval with certain lenders.
Which type of car finance is best for people with a CCJ?
The best car finance option depends on your personal circumstances and goals. For example, if you want to own the car outright at the end of the agreement, you might choose one type of finance, whereas upgrading to a newer model every few years might lead you to another option.
To help you decide, you can read our guides:
- HP car finance versus personal contract hire (PCH)
- Buying a car on finance: HP versus PCP
- HP car finance versus personal loans
These guides will give you a better understanding of which product suits your needs and circumstances.
Car finance with AutoMoney Motor Finance
If you are looking to finance a car but you’re worried you won’t be accepted, AutoMoney may be able to help. Call our team on the Freephone number above or click to apply for car finance with us.
Representative example
You could borrow £10,000 over 60 months with an initial payment of £490.66 (including £199 Admin Fee) followed by 58 monthly payments of £291.66 with a final payment of £490.66 (including optional £199 Option to Purchase Fee).
Total amount repayable will be £17,897.60.
29.3% APR, annual interest rate (fixed) 24.7%.
This example uses the representative APR. This is the rate at least 51% of customers are expected to get.
Lending is subject to status and additional affordability checks. Rates quoted are subject to change and will depend on lending amount and personal circumstances.
FAQs
There is no minimum credit score for being accepted for car finance, as each finance lender has its own rules and criteria. However, if you have a very low credit score, you may find it harder to get approved compared to those with a very good credit score.
Yes, it is possible to get car finance even if you have defaulted accounts on your credit file. However, the rate offered may be higher than expected, as lenders may see you as a higher risk due to your history of defaulting on credit commitments.
Yes, car finance can help improve your credit score. A positive repayment history can show to future creditors that you are a reliable customer. It is important to make sure that all payments are made on time and in full each month to avoid negatively impacting your score.