Judgments used to appear on your credit reports maintained by the three major credit bureaus; Equifax, Experian, and TransUnion. However, in 2017, the credit bureaus decided to eliminate civil judgment records from credit reports.
So, you shouldn’t see judgments on your credit report anymore. However, if you still have a civil judgment showing up on your credit report, you can file a dispute to have it removed.
Find out everything you need to know about judgments, how they affect your credit score, and how you can get them removed even before they expire.
What is a judgment?
A civil judgment refers to a ruling made by a court during a lawsuit. Often, people have civil judgments because of unpaid collections or other financial obligations. Civil judgments used to be public records. Anyone could see them. But, that is no longer the case.
How does a judgment affect your credit score?
Judgments are no longer factored into your credit scores. However, lenders may still check to see whether you have any outstanding judgments against you.
How long does a judgment stay on your credit report?
Under the FCRA, judgments are still allowed to remain on your credit report up to for seven years from the date it was filed.
Different Types of Judgments
While all civil judgments are listed in the Public Records section of your credit report, there are a few different types of judgments to be aware of.
Each one results from how you handle the initial judgment and can impact your credit score differently. So read through each description carefully, so you know which situation could apply to you.
Unsatisfied judgments do the most damage to your credit history. It means that you have not addressed the result of the lawsuit whatsoever and the debt you owe has neither been paid nor settled.
The judgment creditor (who sued you to get the funds) has the right to forcibly collect the money if you refuse to pay or work out a settlement in a timely manner.
Otherwise, the unsatisfied judgment will stay on your credit report for the full seven years. You might receive notice from the creditor at some point, or it may go untouched until it drops off; there’s just no way to know. In some states, you may run the risk of having an unsatisfied judgment re-filed, which we’ll discuss shortly.
A satisfied judgment is one that has either been paid or settled rather than remaining unsatisfied. It’s ideal to get your judgment satisfied as soon as possible because it’s another type of debt that accrues interest. As a result, the amount you owe can quickly multiply.
So how can you satisfy a judgment? There are a few different ways. First, you can pay the judgment in full. However, if that’s not possible, you can also negotiate a settlement, similar to any other way you would for any other type of debt.
In extreme circumstances, you can get the judgment discharged by filing for bankruptcy. Finally, you can do nothing and eventually have the judgment collected forcefully, usually involving wage garnishment.
Once one of these options has been completed, your judgment will switch from unsatisfied to satisfied on your public record and credit report.
A satisfied judgment is better for your credit history than an unsatisfied one. However, it still stays on your credit report for seven years from the date it was filed. Many people think that once it’s paid, the credit bureaus will remove the judgment from their credit report; however, that is not the case.
A vacated judgment is essentially one that is dismissed through an appeal. Vacated judgments should no longer appear on your credit reports. If it does, you can have it disputed as incorrect reporting from the credit reporting agencies.
There are several ways to get your judgment vacated. The first way is to file a motion appealing the original ruling. It’s quite common to successfully appeal the verdict if the plaintiff didn’t follow the proper legal procedure in the original lawsuit.
Procedural reasons might include not receiving a summons to court or receiving a default judgment without a hearing.
Most motions for appeal must be completed in person. So, if you no longer live in the jurisdiction where the lawsuit took place, you’ll need to travel there to submit your paperwork and potentially attend another hearing.
If you win the appeal, you’re entitled to a court document stating the dismissal of your case. Then, you can send a copy to the credit reporting agencies to expedite the removal process of the vacated judgment from your credit reports.
If it’s not removed, you should file a dispute with the credit bureaus, either on your own or through a credit repair company. Of course, a vacated judgment should never be listed on your credit report, but it’s up to you to ensure that all the information is updated accurately.
Judgments are typically removed after seven years, but unfortunately, that’s not always the end of the story. Depending on the state in which you live, the judgment may be renewed. This means it can reappear on your credit report for another seven years.
In some states, judgments can be renewed indefinitely, meaning they’ll keep showing up for years and years beyond the original filing date.
Take a look at the laws in the state where you live to determine whether your judgment can be revived. From there, you can figure out the best course of action to satisfy your judgment and have it removed for good.
What should I do next time if a debt collector sues me?
If you get sued, you will need to pay the debt quickly or appear before a judge in court. The worst thing you can do is ignore the lawsuit. However, that’s precisely what most people do, so usually, the creditor wins by default as the defendant doesn’t show up for court.
If you don’t show up or lose your case in court, a default judgment will be issued against you. Typically, you will be penalized by having a tax lien placed upon your house (if you own your house) or having your wages garnished.
In some cases, you may even be forced to forfeit your belongings. These side effects are even more severe than the damage done to your credit score. So, you really need to address the lawsuit, get legal help, and show up in court. Otherwise, you have a long, hard road to financial recovery ahead of you.
It never hurts to talk to a legal professional ahead of time to explore your options. But, at the very least, you need to attend your hearing, so you don’t automatically give up your rights to a fair trial.
Struggling with bad credit?
If you’re struggling with bad credit and need help getting other negative items removed from your credit report, consider working with Credit Saint.
They have helped many people in your situation. Request a free credit consultation on their website to see what they can do for you.
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