Public Records on Your Credit Report Judgment – If you’ve ever been involved in a lawsuit that went to trial then you are probably familiar with the term ‘judgment.” A judgment is a formal decision made by a court following a lawsuit. In the world of credit, it’s not uncommon for creditors or debt collectors to sue debtors for nonpayment of their debts and obtain judgments.
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Judgments are considered public records, which means anyone has access to view those court filings. Credit reporting agencies commonly obtain judgment records from courthouses and place them on consumer credit reports. These judgments are allowed to remain on consumer credit files for seven years from the filing date.
How to Remove Judgments
Unlike most credit report entries, judgments can be successfully removed well before seven years has passed, but it’s going to take some work and luck on your part. Here’s the lowdown on judgments, their status and how best to get them removed from your credit reports.
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What is a public record?
“Public records” refer to county, state or federal materials that are typically viewable by the public. Examples of public record information that are often included on credit reports are bankruptcies, civil judgments, tax liens, foreclosures and wage garnishments.
How will it affect my credit?
Adverse public records included on your credit report can have severe negative effects your credit score. Generally, only time can lessen the impact of a public record on your credit report. Most public records can remain on your credit report for seven years. However, certain types of public records may remain for longer periods. For example, bankruptcies may remain on your report for ten years, and an unpaid tax lien could remain on your credit indefinitely.
After a judgment has been filed against you it will start to accrue interest, just like any other debt. I’ve seen judgments double in value because of this so-called post judgment interest. If you have a judgment filed against you, the “winner” of the lawsuit—formally called the judgment creditor— is going to attempt to collect. They can do so a number of ways including wage garnishment, so you’re going to want to take care of the judgment as soon as possible.
You can pay the judgment. You can attempt to negotiate a settlement for the judgment amount. You can file bankruptcy and discharge the judgment. Or you can do nothing and let the judgment creditor forcefully collect. Regardless of how it’s done, once the judgment has been paid a “satisfaction of judgment” will be filed with the court.
Normally the judgment creditor will file the satisfaction but you can also file the satisfaction. Once the judgment is satisfied your credit reports will be updated accordingly. And while a satisfied judgment is better than an unsatisfied judgment, it’s not going to be removed from your credit reports any sooner than if it were unpaid.
Credit reports that are maintained by the 3 largest credit bureaus are used to determine a person’s creditworthiness and ability to pay debts. The information on the report includes your credit score, payment history and other information drawn from a wide variety of sources. Court judgments are also listed on your credit report. If you have paid a judgment, it’s important that the payment is reported correctly on your credit report.
Removing A Satisfied Judgment
Go over the definition of a judgment. A judgment is a formal decision made by a court following a lawsuit. In this case, a creditor sues a debtor due to non-payment of a debt. The judgment is a legal requirement to pay the debt, and a judgment is part of the public record.
- There are several forms of judgment. A judgment can be satisfied or vacated. The judgment may remain on your credit report for 7 years after the filing date.
- A credit bureau collects credit information from a variety of sources. Keep in mind that not all creditors (bank, credit card companies) report all credit activity to the credit bureau.
- In many cases, the borrower must follow up to get accurate data reported to each credit bureau. Your efforts can help you ensure that your credit report is based on accurate information.
Satisfy a judgment. A satisfied judgment means that the judgment has been paid. It’s important the paid judgment is reported on your credit report. If you pay a judgment, the total amount of debt that you owe goes down. Also, a paid judgment reduces the judgment’s negative impact on your credit score.
- You can satisfy a judgment by paying the balance in full. When the creditor is paid, that entity must file a satisfaction of a judgment form with the court. This is the former debtor’s evidence that the debt was paid.
- In some cases, you can negotiate a settlement of your judgment. The creditor may be willing to accept a smaller payment now, rather than wait for full payment over a period of months or years.
- You can satisfy a judgment by filing for bankruptcy. The bankruptcy will allow your judgment to be discharged. The discharge means that the judgment amount is no longer owed.
- File a satisfaction of judgment with the court. Once the judgment is satisfied, either you or your creditor can file a satisfaction of judgment document with the court. Each credit bureau should be notified of the satisfaction of judgment filing. The bureaus should use that information to update your credit report.
- When you pay the judgment, check with the credit bureaus periodically to ensure that the paid judgment is reported.
- The credit bureau is required to mark your judgment as having a $0 balance.
- Even though you paid the judgment, the judgment will be listed on your credit report for 7 years after the filing of the judgment. The credit report should include the $0 balance.
How Did That Judgment Get on Your Credit Report in the First Place?
Before we start into how to remove a judgment from your credit report, we need to understand how it got there in the first place. To put it simply, a judgment is a piece of paper signed by a judge that says you owe a debt. It all started by someone filing a lawsuit against you for the debt. You should have received a Summons telling you when to show up to court to defend yourself. So, if you did not attend the hearing, a default judgment was rendered against you. If you did go to the hearing and you lost the case, this too, resulted in a judgment being recorded against you.
Credit reporting agencies, such as Experian, Equifax, and TransUnion, obtain their information directly from the courts. These agencies use a myriad of outside vendors to collect information on people and one of them is most certainly tied into the court system to see when judgments are recorded. Most recorded judgments will remain on your credit file for 10 years. And, after 10 years, the judgment can be renewed – indefinitely if the creditor elects to renew the judgment every 10 years.
Three Ways to Deal with a Judgment
If you recently pulled your credit report to find a judgment listed, there are three ways to deal with it. A judgment won’t guarantee the creditor will be paid because he still has to hunt for your bank accounts and assets. Besides the obvious negative consequence of a judgment, which is a lower credit score, you also have the added stress of worrying about the day that creditor will come after you and seize your money.
Here are the three ways to deal with a judgment:
- Dismiss and/or dispute the judgment.
- Vacate the judgment.
- Remove the judgment from your credit report.
We have already written articles relating to dismissing a judgment and vacating a judgment. So, in this article, we are going to go through the steps to remove a judgment from your credit report.
Steps to Remove a Judgment From Your Credit Report
Not only will there be a judgment on your credit report, but there is also a negative trade line from the original creditor – causing a double ding to your credit score. Read over each credit report carefully as what Experian might report may be different from what TransUnion is reporting. So, you will need to handle each credit reporting agency separately and tailor your plan of attack to fit what each agencies is reporting in your credit history.
Now that you have a current credit report and you have a list of what each report agency has listed in your history, here are the three scenarios to follow. Remember, you are going to mail each bureau a dispute letter and you are going to mail it to them certified/return receipt requested. Each bureau will have 30 days to investigate your dispute and will either send you a letter that they verified the information or they will have to remove the judgment from your credit report. Here are the three scenarios to use in your dispute letters:
- The Debt Belongs to Someone Else. Although this may be the most unlikely one, since a local court issued the judgment, you can challenge it to make sure the court did not make a mistake. Perhaps the case numbers don’t match up between the credit bureau and the court house. Or, maybe the real debtor is a relative or another person with a similar name. Remember, you are asking each bureau to verify this information in 30 days or they will have to remove it.
- The Debt is Already Paid. Again, you are going to write a letter to each agency advising them this debt has been paid. They in turn will have to verify the information in the allotted 30 days time period or they will have to remove it from your credit report.
- The Debt is Old. You need to determine if the Statue of Limitations has run according to your state’s laws. Use our handy-dandy Statute of Limitations for Judgments table to look up your state. Another way to remove an old judgment is to see if the judgment creditor passed away or went out of business. If that is the case, the credit bureaus will not be able to verify the judgment and they will have to remove it.
There are also a few other instances where a judgment can be removed. If you were serving in the military over seas, you never should have been sued under the Soldiers and Sailors Act. Or maybe you were on SSI (social security income) or permanently disabled. Consider the angles to determine if the judgment should and can be removed from your credit file.
Addressing A Vacated Judgment
Be clear about your vacated judgment. A vacated judgment does not mean that the judgment was paid. Instead, a vacated judgment is treated as if it never existed. The court will issue an order to set aside the judgment. That order documents that the judgment has been vacated. You can provide a copy of that order to the credit bureaus.
- Normally, the credit bureaus do not maintain records of vacated judgments. Since they don’t exist from a debt standpoint, there’s no reason to list them on a credit report.
- If a credit bureau does include a vacated judgment on your credit report, you should dispute the item. When you complete their forms to dispute the item, you can include the order to set aside that the court provides.
- Some credit bureaus treat this issue differently than others. One credit bureau may have a written policy not to include vacated judgments. Other entities are tougher on this issue. In fact, there have been class action lawsuits to remove vacated judgments. Ask the credit bureau about their policy.
- A vacated judgment should be completely removed from your credit report. The rule requiring the judgment to stay on your credit report for 7 years does not apply. Instead of showing a judgment with a zero balance, all evidence of a vacated judgment is removed.
Analyze what type of information your credit report contains. Your credit report will contain a credit score along with information found in public records. That will include any court judgments that have been entered against you for debts owed and crimes committed. The public record includes any tax liens that have been entered against your property, and any bankruptcy filings.
- The credit report includes your identity, including your legal name, past addresses, and date of birth.
- A report will list existing lines of credit that you have, including both open and closed credit card accounts. The report will disclose how much you owe to creditors and your payment history.
- A common item on a credit report is a federal tax lien. The IRS may remove a tax lien in certain circumstances. If the tax lien debt has been paid in full, or you have entered into a repayment agreement with the IRS that results in full payment, the lien may be moved.
Request a copy of your credit report. As a matter of law, you are entitled to access one free credit report per year. Credit reports can be accessed from a wide variety of sources, some of which require payment. Request copies of your credit report and your credit score from each of the largest 3 credit bureaus. Sometimes the data can vary by bureau.
- You need to review your credit report for errors, such as a judgment that should not be posted. If incorrect data stays on your credit report, it will impact your credit score. A lower credit score will make it more difficult for you to borrow money at a reasonable interest rate.
- Consumers should also review their credit report for positive credit information that may be missing.
- If you pay off a credit card balance, for example, it’s important that your credit card company report that information to each credit bureau. When each bureau receives notice that your debt was paid off, it will improve your credit score.
Contact for Removal Services:
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