What is it and how does it affect my credit rating?

When you apply for a credit e.g. personal loan, credit card or hire purchase agreement, your details are kept on file by a credit reference agency (e.g. Experian or Equifax) details are also kept on how you manage your accounts e.g. if your payments are late, missed or if you have defaulted on the original agreement.

When you apply for another credit agreement, the lender will assess the information that is currently held on file about you. If you have been missing or late payments they maybe concerned that you will not be able to pay them back, so they may turn you application down. If you repeatedly apply to different companies and are declined then this is also noted and can make you less desirable to credit lending companies.

Can I improve my credit rating?

If you are struggling financially, then it may be a good idea to have debt/credit counselling. This would make your payments lower and easier manage, therefore helping to improve your credit rating by recording that your new payments are being made on time. There are also credit repair companies. They tend to charge large amounts of money to improve your rating but the truth is that they probably can’t do anything that you can't do for yourself. Our counsellors will explain the debt counseling process fully and how your credit (given time) will improve.

What is a CCJ / Default?

If you repeatedly miss payments, then you will have defaulted on the original credit agreement that was signed between you and the credit company. It will be noted on your credit file/report that you have defaulted on the original agreement. If you still cannot afford to pay the contractual payments then the company may pursue you through a county court to regain their money. Hence the term "County Court Judgment" (CCJ), unless a CCJ is paid off in full within the first month it will be held on your credit file for six years along with recordings of late and missed payments.