CoCredo and credit risk industry news

County Court Judgments And Your Credit Rating

• 02/09/2025
• Paul Atkinson

If you are facing a "County Court Judgment" (or CCJ for short), it's crucial to understand the meaning and function of a CCJ, whether you're actively involved in a legal dispute or simply seeking to learn more about the legal system.

If you respond promptly and ensure the accuracy of your credit report (or credit profile), you can positively enhance how lenders and companies you work with behave towards you.

In this blog, we'll delve into the basics of a County Court Judgment, its implications, your credit score, and what you can do if you receive one.

What is a County Court Judgment (CCJ)?

A County Court Judgment (CCJ) is a legal order issued in the UK when a business or individual fails to repay a debt. For UK businesses, a CCJ can significantly affect credit ratings, financial reputation, and access to funding. Understanding how CCJs work—and how to respond if one is issued—is essential for protecting your company’s financial health. In this article, we explain what a CCJ is, how it appears on credit reports, and what steps you can take to mitigate its impact.

The CCJ Process Explained 

1. Debt Default: Before a CCJ is issued, the debtor must first fail to repay the debt on time. This could be a loan, credit card debt, company invoice, or any other type of outstanding payment.
2. Creditor's Action: After the debtor has missed payments, the creditor can apply to the County Court for a CCJ. The court will then review the creditor's claim and the debtor's response.
3. Notification: If the court finds the creditor's claim valid and the debtor has not provided a satisfactory response, a CCJ will be issued against the debtor. The debtor will be notified about the judgment in writing, providing details of the outstanding debt, the court's decision, and the deadline for payment.
4. Repayment: The debtor is required to repay the debt within the specified time frame set by the court. Failure to do so will result in additional consequences.

You may be able to settle the financial dispute in a small claims court where a claim can be made up to the value of £10,000.

What to Do if You Receive a CCJ

If you receive a CCJ, it is essential to act promptly:

• Check the Details: Verify that the information on the CCJ is accurate, including the debt amount and the court's decision.
• Payment or Settling: If you can afford to pay the debt, it's best to do so within the time frame to avoid any further consequences. If you're unable to pay the full amount, contact the creditor to discuss a repayment plan or negotiate a settlement.
• Disputing the CCJ: If you believe the CCJ was issued in error or have a valid reason to dispute it, you can apply to the court to set it aside. Seek legal advice for this process.

Pay within one month to have the judgment record marked as 'satisfied' on the register. Although it will remain on the register for six years, anyone searching will see you have paid. 

Inform the court of your payment by writing to them. Enclose proof of payment from the creditor or business that you owe money to.

How a CCJ Affects Your Business

You might have a county court judgment (CCJ) against you if you owe someone money and a court rules that you have to pay it back. Having a CCJ against you could affect your credit rating, making it difficult to borrow or get credit from a bank, lender, or shop. 

The CCJ will show up on your company credit report (usually between 24-48 hours). A company uses this information to determine whether to lend you money. 

When a CCJ has been set aside, it doesn't mean it's been satisfied; it means the judgment has been cancelled altogether, or court action has stopped, which basically means it no longer exists.

• Reputation Damage: One of the most significant impacts of a CCJ on a business is the potential damage to its reputation. The judgment becomes a matter of public record, and customers, suppliers, and partners can access this information, leading to a loss of trust and credibility. This erosion of reputation can result in a decline in sales, loss of clients, and difficulty in attracting new customers.
• Creditworthiness: A CCJ can severely affect a business's creditworthiness. It stays on the company's credit file for six years, and future creditors and lenders will be cautious when considering extending credit. Obtaining loans, credit lines, or even leasing equipment may become arduous or involve higher interest rates due to the increased perceived risk.
• Limited Access to Finance: For businesses reliant on external funding, a CCJ can lead to limited access to finance options. Banks and financial institutions are less likely to approve loans or overdrafts for a business with a CCJ, making it challenging to invest in expansion, inventory, or new projects.
• Suppliers and Trade Credit: Suppliers are critical to the smooth operation of any business. A CCJ may result in suppliers imposing stricter payment terms or requesting upfront payment, reducing the business's cash flow flexibility. Trade credit options may also become limited, impacting the ability to negotiate favourable terms with suppliers.
• Business Relationships and Contracts: A CCJ can strain relationships with business partners, contractors, and collaborators. Companies may be hesitant to enter into agreements with a business that has a history of financial instability or legal issues, leading to missed opportunities for growth and collaboration.
• Impact on Directors and Owners: It's important to note that if you receive a county court judgment (CCJ) or high court judgment, it will remain on the Register of Judgments, Orders and Fines for six years. This can have an impact on your company's credit rating, so it's crucial to stay aware of any potential judgments.

How to Check for CCJs

In the UK business economy, late payments are still a common issue. To avoid this, it is essential to thoroughly research potential customers before doing business with them.

If you do this, any negative County Court Judgement (CCJ) information on their record will appear on a company credit report. Another option is to access CCJ information for a fee on the Registry Trust website.

When a CCJ is filed against you, it is added to the Register of Judgments, Orders, and Fines database within a month.

The Registry Trust manages the register containing details of all adverse County Court Judgments (CCJs) against companies in England and Wales. Additionally, this company shares data with credit checking companies.

A County Court Judgment (CCJ) lasts on the Records of judgments and your credit file for 6 years; however, there are some exceptions which we will outline below. Within these 6 years, if you apply for credit, your lender will see the CCJ on your credit file. 

How a CCJ appears on CoCredo's Credit Reports

A County Court Judgment will affect the score as soon as it is filed, but if set aside within 30 days, this will not affect the score. If the debt remains, understanding this will also have an impact on the score until it is settled.  

If the CCJ is reflected on one of our business credit monitoring reports, it means it has been filed with the court. If a CCJ monitoring notice comes through, but there is no CCJ in the report, then this means it was issued but settled immediately.

If you are a large business, the impact on your credit report will be minimal in comparison to the value of your balance sheet. 

Mitigating the Impact of a CCJ 

While a CCJ can have severe consequences, proactive steps can help mitigate its impact on a business:

1. Clear Communication: Maintain transparent and open communication with creditors and stakeholders, demonstrating a commitment to resolving the debt issue.
2. Negotiate with Creditors: Engage in discussions with creditors to explore payment plans or negotiate settlements that are manageable for the business.
3. Address Underlying Issues: Identify the root causes of financial challenges and implement measures to prevent similar situations in the future.
4. Professional Advice: Seek legal and financial advice to understand your options and ensure compliance with legal requirements.
5. Improve Financial Management: Strengthen financial management practices, including budgeting, cash flow forecasting, and debt management.

If you pay the debt in full within 1 month of the date of the CCJ, you can apply to the court to have your entry in the Register removed. You'll need to get a certificate from the court to prove you've paid off the debt.

If your entry is removed from the Register, CoCredo will be notified, and your CCJ details will be erased from our credit reports. You may be able to regain credit once the CCJ has been cleared.

Conclusion

A County Court Judgment (CCJ) can have serious consequences for your business—from damaging your credit score to limiting access to finance and straining relationships with suppliers and customers. Acting quickly to resolve the debt, seeking professional advice, and improving financial management are key steps toward recovery.

At CoCredo, we offer tools to help you monitor credit risk and spot CCJs early. We also work with trusted partners who provide debt recovery solutions to support your business. Call us on 01494 790600 to learn more.  

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