So, you’ve gone through the process of declaring Chapter 7 or 13. Now, you’re wondering whether you can remove repossessions from your credit report. Like most things in the financial industry, it’s not black and white. There are some situations in which they can be erased from your profile and...
If you are struggling to improve your credit, you should see if it is possible to remove a judgment from your credit report. Judgments are pesky and can, unfortunately, stand in between you and a high score. Are you not sure what a judgment is? Are you wondering how to tell if there are any of them recorded in your account? This article will walk you through the basics of what these rulings are, what they mean, and how to get a judgment off your credit report.
Additionally, you will learn what is important to know if you are unable to remove any lingering on your report. And, you will pick up some recommendations from professionals that can help you out. While it is possible to dispute a judgment on your credit report yourself, you might increase your chances of success by hiring someone with experience. At the very least, you’ll save yourself some time and frustration.
So, what are you waiting for? Read on to learn how to get one step closer to achieving your financial goals.
Update: All civil judgments are coming off all credit reports for good. All three major credit reporting agencies are dropping civil judgments from their reporting after a Consumer Financial Protection Bureau study (CFPB) found issues with the ways that organizations reported these derogatory items to credit bureaus.
The rest of this article is in place for reference purposes. However, you should no longer need to remove a civil judgment from your report.
- What is a Judgment?
- Types of Judgments
- How to Remove Judgments from a Credit Report?
- How Long Does a Judgment Stay on Your Credit Report?
- How Does a Judgment Affect Credit Scores?
- Avoid Judgments or Get Rid of Them ASAP!
What is a Judgment?
A court judgment may be passed down on you when someone you owe money to decides to take their claim to a higher power. They can ask a judge to take a look at the deal you made with them, and then make a decision about whether they actually have a claim against you. If you do not show up to your hearing on the matter, or the person you owe wins, then the court will issue a judgment against you.
After it gets passed, formal proceedings are going to ensue, in which the ruling passed is entered onto your record. So, what is a judgment going to mean for you going forward? Essentially, it will make it easier for the person who took you to court to get money out of you. They can use unpaid judgments to deduct money out of your salary or put your property on the line.
Types of Judgments
There are two types of legal realms in which judgments exist—criminal and civil judgments. It is the latter option that will get reported to the credit bureaus, which can then affect your overall financial standing. The types of judgments include:
Judgment removal will vary depending on which of the above varieties you have incurred. The best version you can have is vacated because this means that it has been dismissed in court and you no longer have to deal with it. The next best version to have is a satisfied judgment because although you used to owe something, you don’t anymore, and you can just focus on removing it.
How to Remove Judgments from a Credit Report?
Outstanding judgments are the worst to have and encompass the unsatisfied and renewed options above. If you have an unsatisfied judgment on your credit report, then it can follow you and be renewed across state lines. Essentially, these negative marks will not leave you alone until you pay them or are successfully able to remove the judgments from your credit report.
1. Appeal the Ruling
If you incur a judgment, then the first thing you should look into is attempting to appeal it. Appeals are usually available to anyone after a judgment has been passed. The exception is if you have already attempted to make an appeal, and it has been denied. An appeal is when you ask a judgment lawyer to prove to the court that their first finding was incorrect. If your appeal is successful, your judgment will be deleted and you will not have to worry about it anymore. Things will be as if the original court proceeding has never happened.
There are some situations in which it does not make sense to fight in the appeals process though. For example, you should compare how much your judgment is for to how much it would cost to continue paying for court proceedings. If it’s just cheaper to pay what you owe to your lender, that may be a better route for you. The only thing is, you might not be able to get your judgments removed from your credit report. If a high score is a necessity, and you don’t care how much it costs you, then the appeals route is the one for you.
2. Obtain a Copy of Your Credit Report and Scan for Errors
If you did not choose to appeal your judgment, or you did but you lost, then your next course of action is to see if there are any judgments on your credit history that should not be there. You are actually able to get at least three free copies of your report every year without impacting your score. Depending on the financial institutions you have relations with, you may even be able to get more!
Get a copy of your report and look through it to see if there are any errors, such as unsatisfied negative marks that you know are satisfied judgments or judgments that should not be there at all. If there are, you will be able to challenge them and get them off of your account. Then, you will see a considerable increase in your score. While you’re at it, keep an eye out for other negative marks that may be fought!
3. Challenge Potential Errors
If you have identified judgments you know are incorrect in the above step, then you should definitely challenge them. To do this, you need to submit a dispute letter to the entity or entities that you believe made the mistake. It’s important that the mistake was actually a typographical or misrecording error made on the entity’s behalf and not a mistake that you made. Otherwise, your challenge will fail.
In your dispute, make sure you include:
- Your personal contact information;
- The mistake you have found; and
- Physical evidence proving that the mistake is indeed an error.
After you submit your challenge(s), expect it to take about a month to hear back about whether or not you succeeded. Remember that the person reading your letter will not be the exact credit reporting agency employee who made the mistake, so it will only hurt you to use a negative tone or condescending language.
4. Consider Hiring a Professional
It is unnecessary for you to pay anyone to help you improve your financial standing. Anything a professional can do you can also do yourself, and for free! However, oftentimes, industry jargon and little free time can get in between you and being able to do a good job improving your own score. Hiring one of the credit repair companies from the list below may be able to relieve you from some of your stress. Among them, the best options are:
The primary benefit of working with credit fixing companies is that they have done everything that you are going to have to do thousands of times before. They know all of the tricks for getting the best results possible. This could mean being able to get your judgments completely removed, its time on your account diminished, or the amounts lowered.
Pros may also catch things that you missed. If you don’t have room for mistakes or do not have time to invest in turning through pages and pages of complicated directions, then seriously consider hiring help. Thanks to the Fair Credit Reporting Act, companies are not allowed to advertise promises they cannot keep. Therefore, you do not have to fret much about getting scammed.
How Long Does a Judgment Stay on Your Credit Report?
There is not a one-size-fits-all answer to this question, as it varies depending on where your current domicile is. At the very least, you will likely have to deal with your judgment for around five years. Like many negative marks though, judgments can stubbornly stick to your credit report for up to seven years even if they have been resolved in other states.
If you leave your judgment unpaid, it may actually follow you in your account for up to 10 years. The clock does not start from the day you missed your debt. Rather, it usually begins the day the judge brings down his gavel in court. In some rare cases, the court in your state may decide to click its timer on the last day that the person you owe tried to collect from you. Regardless of which state you live in though, paying your judgment is going to be your best option if you cannot get it deleted.
There is an exception to the above information, however. If you end up choosing to file for Chapter 7 aid, then it is possible that bankruptcy will clear your judgment. Remember that this plan should be treated as a last resort though.
How Does a Judgment Affect Credit Scores?
Credit scores are like potpourri — lots of different things go into them. The credit bureaus are not completely transparent about the formulas they use when adding up your personal information and determining your trustworthiness as a potential borrower. That being said, the credit bureaus are open about the fact that judgments do play a role in dragging your score from a perfect 850.
In the past, they could drag your number down by as much as 150 points. (Today, this is no longer true. See the above article update.) This is considerably more than being late on a payment on one occasion or having too many different lines open at a given point. Additionally, this information is a public record. So, you have to worry not only about your score but also about people in your professional and social life finding out that you are potentially in financial trouble.
Avoid Judgments or Get Rid of Them ASAP!
At the end of the day, removing judgments from your credit report if possible is the best thing you can do for yourself and your score. Whether you do it on your own, or with the help of experienced professionals, this task should be number one on your to-do list. Especially if you are currently trying to open up a new line of credit. Nobody is going to be interested in giving you their money if you don’t seem trustworthy.
So, now that you are armed with the definition of a money judgment and what you can do about it if you have one, start improving your score today, and get the collection agencies off your back! Your future self will thank you.