CCJs mounting for those with adverse credit problems

Mon, 13 Mar 2006

The number of county court judgements (CCJs) being issued is on the up, according to the Registry Trust, so those with adverse credit problems are being urged to take action to get out of debt.

Commenting on the findings, Stuart Glendinning, head of loans at price comparison website Moneysupermarket, says with the UK's "debt boom" over the last decade, these figures are hardly surprising.

He points to "warning signs" like the increase in individual voluntary agreements and "mounting provision being designated by the UK banks to cover bad debt".

Those with adverse credit problems culminating in CCJs are likely to be struggling for survival, Mr Glendinning says, but he warns them to think twice before taking out more loans.

He says that consolidation loans could make matters worse in the long run.

"Clearly, individuals who are worried about debt need to reduce their borrowings by paying off the sums outstanding as best as possible and, just as importantly, not borrow any more," according to Mr Glendinning.

He says that those with a CCJ need to realise that once their finances are sorted out, the CCJ remains on their credit record for six years.

"This will have a real impact on their ability to secure borrowings in the future as well as affect the rates offered to them."

Mr Glendinning concludes that the cost implication of an impaired credit profile can be significant.

He says that irrespective of a person's credit profile, anyone planning to take out a loan should shop around for the best deal and competitive interest rates.

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