Over a quarter of people think they need to wait at least five years after receiving a CCJ before applying for a mortgage.

The 2024 Pepper Money Specialist Lending Study reveals 66% say they know what a CCJ is, but their understanding falls when it comes to its impact on a mortgage application.

Some 18% of people believe they need to wait longer than five years, with 8% thinking they would need to wait up to five years.

The study identified that 4% of people have received a CCJ in the last three years, although this was the least common cause of adverse credit. The most common cause was a missed credit payment (11%), followed by several missed payments leading to a Default (7%) and unsecured arrears (7%). A further 6% say they have entered a Debt Management Plan in the last three years, with 5% having secured arrears.

Respondents’ main reason for missing payments was difficulty managing money (30%), 27% said it was due to reduced income for a period, and 22% cited increased expenditure.

A Pepper spokesperson says: “Despite the fact that 78% monitor their bills monthly, there’s an upward trend of adverse credit in this year’s study. 8.38 million people have experienced adverse credit in the last three years. This is the highest figure since we began our regular research five years ago. 

“There remain some significant misconceptions about the impact that adverse credit can have on a mortgage application, with more than a quarter of people believing they would need to wait at least five years after a CCJ before applying for a mortgage. 

“The reality is that many people with a CCJ could still have a successful application within months of it being registered. This presents a big opportunity for brokers to work with existing customers and new customers to challenge the misconceptions and help more people to achieve their goals.”

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