More than a quarter of people (26%) think they need to wait at least five years after receiving a county court judgement (CCJ) before applying for a mortgage, research by Pepper Money has shown.

According to the latest Pepper Money Specialist Lending Study, 66% of people said they know what a CCJ is, but their understanding fell when it came to the impact of a CCJ on a mortgage application.

The findings revealed that 18% of people believe they need to wait longer than five years after receiving a CCJ before applying for a mortgage, while 8% thought they would need to wait up to five years.

Pepper Money’s 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 was a missed credit payment (11%), followed by several missed payments leading to a default (7%) and unsecured arrears (7%). A further 6% said they had entered a debt management plan (DMP) in the last three years, with 5% having secured arrears.

Sales director at Pepper Money, Paul Adams, said that “significant misconceptions” remain about the impact that adverse credit can have on a mortgage application.

“The reality is that many people with a CCJ could still have a successful application within months of it being registered,” Adams commented. “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.”

Managing director at Mortgage 1st Business, Jon Stones, added: “Unfortunately, just a little knowledge can be a dangerous thing. While it’s encouraging that so many customers are aware of their credit profile, this research shows there are still many people who don’t fully understand the impact it can have on their mortgage opportunities.

“If we allow these misconceptions to continue, thousands of people could be missing out on accessing the mortgages they need to help them achieve their goals.”

---