A County Court Judgement (CCJ) is a court order for unpaid debt that has been successfully claimed by a creditor against your business. It is a serious negative event that significantly harms your credit score. If you have a CCJ, prioritising payment and ensuring its satisfaction is crucial.
Why would a CCJ be issued against my business?
A CCJ is issued as a last resort when attempts to recover unpaid debt through standard collection methods have failed. Common reasons for a creditor to pursue a CCJ include:
Unpaid invoices: failure to pay suppliers or service providers according to agreed terms.
Outstanding loans or credit balances: not meeting repayment obligations on loans, credit cards, or other credit facilities.
Unpaid business rates or taxes: failure to pay local authority charges or taxes owed to HMRC.
Breach of contract leading to debt: situations where your business has breached a contract, resulting in a financial judgement against you.
Impact of a CCJ on your business credit profile:
A CCJ is a significant negative marker on your business credit profile and can have severe consequences:
Significant credit score reduction: a CCJ will substantially lower your credit score, indicating a high level of credit risk to potential lenders and suppliers.
Limited access to future credit: lenders are very hesitant to extend credit to businesses with outstanding or recently satisfied CCJs.
Higher borrowing costs: if you can secure credit, you will likely face higher interest rates and less favourable terms.
Difficulties with suppliers: some suppliers may refuse to offer trade credit or may demand upfront payments.
Damage to business reputation: a publicly recorded CCJ can negatively impact your business's reputation and potentially deter customers or partners.
Enforcement action: if the CCJ remains unpaid, the creditor can take further legal action to enforce the judgement, such as bailiffs seizing assets.
What to do if you have a CCJ on your profile:
Understand the details: review the specifics of the CCJ on your Capitalise credit profile, including the court, date, and amount.
Prioritise payment: if the CCJ is still outstanding, your immediate priority should be to arrange payment to the creditor to satisfy the judgement.
Record satisfaction: once the debt is paid, ensure that the court records the judgement as "satisfied." You may need to provide proof of payment to the court.
Check your credit profile: after the CCJ is marked as satisfied by the court and reported to Experian, monitor your Capitalise credit profile to ensure the update is reflected. While a satisfied CCJ still remains on your record for six years, it indicates that the debt has been settled, which is viewed more favourably than an unsatisfied one.
If the CCJ is incorrect: if you believe a CCJ has been wrongly recorded against your business, you will need to take legal advice and potentially apply to the court to have the judgement set aside.