For most of us our credit rating fluctuates throughout our lives, this is usually impacted by how we’ve managed money we’ve borrowed in the past. Those of us who’ve managed to pay back any credit we’ve had on time are generally able to keep our credit ratings positive and maintain a high score. This makes it easier to obtain further credit in the future as new lenders don’t see us as a risk. A bad credit rating makes it harder to be approved for a mortgage, credit card or a traditional loan.
However, should we struggle to keep up payments, or simply fail to pay bills on time our scores can drop over time. Maintaining a positive credit score is actually easier than it sounds. For example, should we miss a bill for whatever reason, such as being paid a day late by our employer, we can normally avoid any damage to our credit rating by calling our creditor and letting them know. They will then put a temporary freeze on the account which allows us time to get paid and then pay the bill we missed.
Should we not pay a bill for 30 days then we risk our creditor cancelling whatever service we have with them. Should this pass 90 days, then we risk a default and our debt being passed to a specialist collections agency. Where a default can be damaging to our credit file and take some time to disappear, if we then fail to keep up with our payments again, we then risk something worse; a CCJ.
A CCJ stands for Country Court Judgement, it’s when those we owe money to take legal action against us, using the law to enforce the debt be paid. In most cases the court will be lenient and put a system in place to allow us to pay the debt back, but as far as our credit files go a CCJ causes some lasting damage. It communicates to lenders that we were given multiple chances to pay the money back, but didn’t, and can make the prospect of further credit very difficult to achieve.
Sometimes the person who’s received the CCJ may actually be disputing the money owed, they may not actually owe it at all and it’s an error on the part of the creditor. In some situations, this can be resolved before it gets to this stage. But if not, the CCJ still happens and those in receipt have a fight on their hands to have it removed, although it can be done.
A CCJ however doesn’t mean your credit file is damaged forever, our credit rating can recover with some work and there are things we can do to make this easier. Simply paying our debts and managing our finances well are a start, but nobody chooses to get into financial difficulty and even after receiving the CCJ their problems may persist. The difficulty now is they may struggle to get credit from anyone else. In a crisis this can be worrying and frustrating for someone who’s dealing with a CCJ, although help is available.
Just because someone has a CCJ on their file doesn’t mean they can’t get credit in a crisis. If our car breaks down and we need repairs, then we need to find the money from somewhere. In many cases a payday loan company can help. While payday loan companies are known for helping those who have poor credit, they also help those who’ve received a CCJ in the past too. Having a CCJ on your file may feel like you’ve been blacklisted from creditors everywhere, but there is always help available if you know where to look.
Payday loans are generally designed to help anyone in need, regardless of their financial history. Failure to pay them back makes it unlikely they’ll be willing to lend again, but they’re often prepared to take a chance on nearly anyone. This means that if you’ve had a CCJ and find yourself in a crisis, i.e. car has broken down, then a payday loan will be a way to help resolve the situation.
Payday loans are mostly only small amounts of money, meaning they are manageable and easier to pay back. Emergency loans of bigger amounts are available from some companies, even for people with CCJs, but their application process is slightly more comprehensive than payday loans. The appeal of payday loans is they are usually auto approved and available to all in a matter of minutes.
The main benefit of payday loans however isn’t the fact they offer quick cash when you’re in a pinch. They also have a much more valuable purpose, especially for those who have CCJs. For those of us who’ve recently received a CCJ we may be wondering how we’ll ever manage to build our credit rating back up. Well by using payday loans, this can be done much more quickly.
In the UK our credit rating is affected by being granted credit and then paying said credit back. Being denied credit has a negative impact on our file, but when our credit it approved our file receives a positive boost and improves slightly. Once we pay the money back in full it then gets a further and more significant boost.
Now as payday loan companies typically offer their services to anyone, getting approved for credit and taking advantage of the small boost this gives our credit file is simple to achieve, even for those of us with CCJs. What’s more, as payday loans are usually made up of small, manageable amounts of cash, paying them back on time is relatively easy. This way someone who’s received a CCJ can slowly built their file back up by taking advantage of the way payday loans work.
Lots of people who’ve received a CCJ in the past use payday loans simply to build their credit rating back up, they may not even need the loan itself. They apply, receive the cash, pay it and the interest back when they’re supposed to, sit back and steadily rebuild their credit file.
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