A judgment is one type of public record reported to the three consumer reporting agencies--and it can severely tarnish your credit history. When a creditor files a civil suit against you for a debt owed, a judgment essentially states which party prevails. A judgment against you will include a monetary award by the court to your creditor and can be enforced in various ways, such through wage garnishment. It's possible to take certain legal actions after a creditor sues you that will delete a judgment from your credit history. But as noted by Experian, one consumer reporting agency, most consumers are more concerned about how paid judgments are reflected in their credit files--and if they can be removed.
Judgments and Your Credit Report
Step 1
File a motion with the deciding court to have the judgment vacated. However, as noted by West's Encyclopedia of American Law, courts are loathe to grant motions to vacate judgments, so make sure you have substantial cause. This may occur, for example, if the creditor failed to provide you sufficient notice the lawsuit was filed. Another instance may be if you truly do not owe the creditor, which might occur in a case of identity theft. To determine if it's worth attempting to get a judgment vacated, consult an attorney. If you lack sufficient grounds to make your argument, proceed to Step 2.
Step 2
Make note of the date on which the creditor filed suit against you--and wait it out. If you see a notation of the judgment in the "public records" section of your credit report, this is to be expected. Experian notes that judgments, paid or unpaid, remain on your report for seven years from the filing date, after which they should drop off. The financial advisers at Credit.com strongly advise you to satisfy (pay) the judgment during this time. Not only do many prospective lenders require you to satisfy unpaid judgments before approving a loan, credit scoring models view your credit report more favorably if this debt is paid in full.
Step 3
If a record of the judgment still remains on your credit record for more than seven years after the filing date, file a dispute with the consumer reporting agency that maintains the report. File your dispute in writing, urges the Federal Trade Commission, and send your correspondence by certified mail (return receipt requested). It's helpful to send copies of your credit report with the expired judgment record highlighted, as well as copies of legal documents that provide proof of the creditor's filing date.
Tips and Warnings
- You will receive a written summation from the consumer reporting agency after it investigates your dispute, usually within 30 days. If the judgment is removed from your credit record, you will be provided with a revised report.
- Be aware that some state laws permit creditors to renew an unpaid judgment, Credit.com warns. You may be legally indebted to the creditor until you satisfy the judgment. Credit repair "specialists" may urge you to dispute a judgment that is reported to consumer reporting agencies in an accurate, timely manner in hopes the court will not verify the record within the 30-day window. However, under the Fair Credit Reporting Act, consumer reporting agencies are not required to address disputes that are filed with frivolous intentions.
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