The CCJ Issue
Pretty much every high street bank will undertake a personal credit search on you when you apply for borrowing. It matters not whether you are applying for your business or personally, a credit search will be undertaken and the CCJ issue arises.
The rule of thumb is that if a CCJ has been filed then the bank will likely decline your application. Whether the CCJ is live, satisfied or disputed makes little difference, you are unlikely to get your lending sanctioned.
The basic view is that a CCJ indicates that you have defaulted on an agreement, failed to resolve or failed to reach an agreement with the other party and as such are likely to do the same again.
But, how fair is that assumption and what is the hypocrisy?
The CCJ Hypocrisy
It is worth noting that there are many reasons why companies pick up CCJs. It is not all about bad credit or default. Many CCJs come from contract disputes that went to court and were never properly understood, some CCJs should never have been filed in the first place. The whole issue of the CCJ is misunderstood by the high street lender.
A short search at Companies House reveals some interesting facts. I ran a quick public search on Lloyds Bank plc, Barclays Bank plc and HSBC Bank plc, this is what I found.
- Lloyds have 22 CCJs totalling £96,653
- Barclays have 18 CCJs totalling £117,694
- HSBC have 10 CCJs totalling £10,261
This is without looking at subsidiaries and connected companies.
OK, there are reasons and the bigger the business the easier it is to pick these things up but you do start to see my point about hypocrisy. To decline a business a facility because of a CCJ when you have several yourself is a strange position to be in.
Getting Over The CCJ
Despite everything the high street banks will have policies and practices and if we start to look too in depth at the UK banking sector none of us will ever come up for air. The bottom line is that if you know that your credit is below par then stop applying to lenders that will always say no. It might not be a quick no, but poor credit invariably causes a decline among the high street banks.
The best option is to recognise that things are not perfect, then look for what you want from a lender that understands. We can help you with this, please just ask.
In the meantime, hypocrisy it is.
By Dave Farmer
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