What is a Judgment? How Can I Remove it from my Credit File?
A judgment is the decision of a court that has become final and executory. It includes default judgments and civil judgments which can be quite harmful to your credit score. Understand “What is a judgment”, why they appear on your credit file, and what you can do to get them off your credit report.
Why do judgments appear in my credit file?
When creditors or debt collectors sue you for nonpayment of your debt and proved that they have the right to recover a sum of money from you, the court will issue a formal decision, called, “Judgment”. Because a judgment is a public record, anyone who has an interest in your credit status can access those files. The credit reporting agencies will also include the judgment records in your credit file and will remain there until vacated or satisfied—though it will still stay there for seven years.
How do judgments affect my credit score?
Judgments issued by the court against you because of late or unpaid debts can lower your credit score. It can reduce your ability to secure a loan. Worse, staring at a pile of bills each single day and denied applications beats a good mood. Nobody has ever enjoyed being declined by lenders especially when you have limited financial resources to pay for your daily needs and provide for your family or to invest in your future. Consistently borrowing high-interest loans can also lead to more debts, lower your self-esteem and can really hurt relationships.
Can I get a judgment removed?
With all the claims of many credit repair agencies, how will I know that I can really get a judgment removed?
The credit reporting agencies in the country collect your credit information from your credit card companies, utility providers, government records and everyone else you owe money to. But, there are times that the collected credit information is incorrect or inconsistent with the findings of other reporting agencies. You can dispute such judgment on your credit report and have it removed.
If you paid your judgment debt on time but it was reported late by the credit agency, it will mark your debt as paid, but it will remain on your credit file. So, take care of the judgment as soon as the judgment creditor attempts to collect from you. Otherwise, you may accrue post judgment interest which can double or triple the value of your judgment debt.
You can also discharge the judgment by paying it, or allowing the creditor to forcefully correct them, or negotiating a lesser settlement for the judgment amount. The judgment creditor will file a “satisfaction of judgment” with the court afterwards. Or, you can file the satisfaction and it will be shown on your credit file afterwards. But, remember that it will still remain in your credit report for seven years. While other potential lenders and employers may see the judgment, the fact that you satisfied it will put you in a better position than someone with unsatisfied judgment.
Unlike satisfied judgment which means that it was already paid. A vacated judgment is one which is treated as if you never incurred.
File the vacated status with the courts and your credit report will be updated accordingly–your judgment will be removed from your credit file. So, if the credit report still contains the vacated judgment you have the right to have it removed. Submit a letter of dispute to the credit reporting agency and attach a copy of the “order to set aside” the judgment.
If you fail to settle the debt you owe and the creditor refiles or revives the judgment before it reaches the 7-year expiration period, it will still remain in the credit report for another seven years from the date of filing.
If the judgment remains on your credit report after 7 years and 6 months, which the average period wherein most judgments remain on credit reports-contact the credit reporting agency and have it removed.
Is it possible to get a judgment removed from your credit file before the seven year period?
Yes. Sometimes, credit agencies grant removal requests. So, there’s no harm in trying. The credit agencies investigate any disputes within 30 days after filing.
A better solution to remove judgment from your credit report
It is difficult to remove a civil judgment correctly in your credit report. Whether you pay off your damages or debts, they will still remain on your file for seven years, until you send a removal request.
So, it is advisable to pay off a civil judgment on time. But, what happens if you cannot access low-interest loans and many lenders turn down your applications because of poor credit? Debt consolidation loan is one of the options you can pick to improve your credit health. The moment you pay off the debts, your credit status will be updated to reflect that the judgment was satisfied.
Learn more about “what is a judgment” and the right debt consolidation loan suited to your condition. Contact debtconsolidationn.com.au today!