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Judgments And Credit Reports

Judgments do not always show up on credit reports. The way it often goes is, if you check your credit report out of curiosity, they may not be there; and later, when you attempt to rent something, apply for a credit card or a loan, judgments magically appear and seem to stick like glue.

This article is my opinion, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.

Anyone can sue anyone else for any real or imagined reason. When someone sues you, that does not go on your credit report, unless they later win their judgment against you. Credit reporting agencies usually and eventually find judgments, especially after judgment liens are recorded. It takes a while for a judgment to show up on your credit report. If you satisfy a judgment quickly, it may never show up on your credit report.

Disputing a valid judgment will not do much good, because it is easy for your judgment creditor to verify the debt. If you ignore judgments, they will probably stay on your credit report for 7-10 years, and potentially longer if the judgment gets renewed and new liens are recorded in the future.

Judgments often show up in the public record section on credit reports. On credit reports, unsatisfied judgments are usually worse than most other collection accounts, although not as score-lowering as a bankruptcy.

Unlike typical debts, judgments may be enforced through garnishment, can be used to lien your current or future property, and they can be renewed. Judgments show up on credit reports long after you pay them off. However, a satisfied judgment looks far better on your credit report than one that is unpaid.

If the judgment against you has been voided or satisfied, or the wrong amount owed shows on your credit report; you can fill out and return a debt dispute form to each of the credit bureaus. If the judgment on your credit report is valid, consider negotiating with your judgment creditor. You might be able to negotiate a settlement to satisfy the judgment for a fraction of the total amount, perhaps negotiating a future payment arrangement with your creditor.

Be sure to get any arrangements made with your creditor in writing, in case they are needed. After paying your creditor what you both agreed to, they should satisfy the judgment at the court and send you a copy of that satisfaction. Even if your creditor does not send you a copy of a properly satisfied judgment, you can get a copy of it from the court. After you buy a court-endorsed judgment satisfaction copy, you can send copies of it to the credit bureaus.

An unfair part of the credit reporting system is their "dates of last activity", which is a large part of credit score calculations. Debts and other problems older than two years, are much less important than newer items. That means a recently satisfied judgment will be considered an updated item, because its status will be updated to have been paid. That payment update might temporarily lower your credit score, compared to an (e.g., five year old) unpaid judgment. After two years, if nothing else has changed, your credit score will go up again, and probably will be higher, because that unpaid judgment will have been satisfied for two years.


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