How Do Judgments Affect Credit Reports?

Published: 17th January 2013
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Judgments do not always appear on credit reports. How it sometimes goes is, if you check your credit report once a year, they might not appear; and then, when you try to rent anything, try to get credit card or a loan, judgments magically appear and seem to stick like glue.

My articles are my opinions and are not, legal advice. I am a judgment broker, and not a lawyer. If you ever want legal advice or a strategy to use, you should contact a lawyer.

Anyone may sue anybody else for any real or imagined reason. When someone serves a lawsuit on you, it doesn't go on your credit report, unless they then win their judgment against you. Credit reporting agencies usually and eventually find judgments, especially when judgment liens get recorded. It can take a while for a judgment to appear on credit reports. If you satisfy a judgment fast, it may never appear on your credit report.

Disputing valid judgments won't do anything, as it's simple for the creditor to verify your judgment debt. If you ignore judgments, they will most likely stay on credit reports for 7-10 years, and potentially longer if your judgment is renewed and additional liens are recorded later.

Judgments often show up in the public record area of credit reports. On a credit report, unsatisfied judgments are usually worse than most other collection accounts, although will not hurt your score as much as a bankruptcy.

Different than regular debts, judgments may get recovered with garnishments, can be used to lien your future or current property, and they can be renewed. Judgments appear on your credit report long after you pay them off. However, a paid judgment looks a lot better on a credit report than one which is unpaid.

If the judgment against you was satisfied or voided, or an incorrect amount owed appears on your credit report; you may complete and send in a debt dispute form to each of the credit bureaus. If a judgment on your credit report is accurate, consider working things out with your creditor. You might be able to negotiate a settlement to satisfy the judgment for a fraction of the total amount owed, potentially negotiating a payment plan with the creditor.

Be certain you get any arrangements made with the judgment creditor in writing, in the event they are needed. When you pay your creditor what was agreed to, the creditor should satisfy your judgment at your court and send you a copy of that satisfaction. Even if the creditor does not mail you a copy of a correctly satisfied judgment, one can buy a copy of the satisfaction from your court. After you get a court-endorsed judgment satisfaction copy, you can send a copy of it to the credit bureaus.

An unfair part of our credit reporting system is their "dates of last activity", which can be a big part of credit score calculations. Debts or other issues older than 2 years, become a lot less important than newer things. This means a newly paid judgment will be considered to be updated item, because its status will show as have been paid. This updated payment might temporarily lower your credit score, compared to an (e.g., five year old) judgment that has not been paid. After 2 years, if nothing else changes, your credit score will go up again, and most likely will go up again, because that previously unpaid judgment will have been satisfied for two years.


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