5 Things You Need to Know about Judgments

and Your Credit

Written by John Ulzheimer

Like so many things within the world of credit reporting and credit scoring, the subject of judgments and their impact on your credit is
often very misunderstood. There are simply too many myths around judgments, which compounds the problem.

If you feel confused about how judgments impact credit reports and credit scores then heres some clarity on the issue.

1. How Do Judgments End Up on Credit Reports?

If you are sued in court and the court or the jury rules against you then a judgment is filed in the adverse partys favor. The judgment
is actually filed against you by the court, not by the party who initially sued you. Once a judgment is filed against you it may not be
long before it finds its way onto your credit reports.
However, the manner in which judgments end up on credit reports is quite a bit different than the way in which other accounts find
their way onto your credit reports.

The majority of accounts which end up on a consumers credit report i.e. mortgages, credit cards, collection accounts, etc. are
reported to the credit bureau by lenders or collection agencies, aka data furnishers.

Courthouses and court clerks are not data furnishers. They do not report information about judgments (or any other public record) to
the credit bureaus. Instead, the credit bureaus proactively seek out information regarding judgments through the use of public record
vendors like PACER and LexisNexis.

Once a credit bureau has acquired information about a newly filed judgment they will include the judgment on the consumers credit
file.

2. Unsatisfied Judgments and Credit Reporting Longevity

The majority of judgments are allowed to remain on a consumers credit report for up to 7 years from the date the judgment is filed by
the court. Unsatisfied or unpaid judgments are no exception to the 7-year rule.

And, when it comes to your credit scores it should come as no surprise that judgments can have a serious negative impact.

Judgments are considered to be a major derogatory credit entry by both FICO and VantageScores credit scoring systems. The extent
to which a judgment will impact your scores will lessen somewhat with time, but it will still damage your scores until the day it is
removed.

Unsatisfied judgments (aka, judgments that have not been paid and satisfied) also have the potential to come back and bite a consumer
a second time as well.

The reason unpaid judgments may have an added downside for consumers is due to the fact that they have the potential to be re-filed.
If a judgment is re-filed before the initial 7 years expires then it can be picked up by the credit bureaus again and can actually remain
on the consumers credit report for 7 years from the new filing date.

3. Satisfied Judgments and Credit Impact

When a judgment has been paid the court will update the status of the judgment and file whats referred to as a satisfaction of
judgment. One of the most common misunderstandings about the reporting of satisfied judgments is that a satisfied judgment will be
removed from a consumers credit report prior to the 7-year credit reporting statute of limitations.

Unfortunately for consumers, this idea is untrue. Satisfied judgments continue to remain on a consumers credit reports for 7 years
from the date the judgment was initially filed by the court.

Although most consumers find it disappointing that satisfied judgments could continue to harm their credit scores for many years,
there are still two benefits to paying off a judgment.

As mentioned above, unpaid judgments not only harm a consumers credit scores but they carry the added risk of being re-filed.
Additionally, unpaid judgments accrue interest, just like any other debt.

The interest rates vary but its not unheard of to have a judgment accruing double digit interest, every year.

4. Vacated Judgments and Credit Reporting

If a consumer appeals a previously filed judgment theres a chance they can have it vacated. When a court vacates a judgment, it is as
if the judgment never existed.

Thankfully for consumers, the credit bureaus will delete vacated judgments from credit reports. Vacated judgments are recorded as
such in court records so its not hard for the credit bureaus to confirm the new status.

Or, if youre able to get a copy of the vacate order you can provide a copy to the credit reporting agencies and speed up the process. If
you are able to get a judgment vacated then you can dispute the status of the judgment with the credit bureaus and ask them to delete it
from your credit reports.

If youve got it then be sure to include proof that the judgment was vacated with your disputes, although this is not required. Also, be
sure to dispute the judgment with each credit bureau that is reporting the item.

If you are unsure which credit bureaus are currently reporting the judgment then you can always obtain free copies of all 3 of your
credit reports each year at www.annualcreditreport.com.

5. Judgments and Mortgage Loans

Not only is it possible that a judgment will trash your credit scores, but an unpaid judgment will also make it much more difficult you
to qualify for a mortgage loan. Judgments can lower your credit scores to the point where you may not be able to qualify for a
mortgage loan.
 To add insult to injury, even if your credit scores are high enough to qualify for a mortgage in spite of the presence of a judgment the
lender is almost certainly going to require that the judgment be paid and satisfied prior to closing.

If you have already paid and satisfied a judgment that was filed against you do not just assume that the judgment is being reported
correctly by the credit bureaus.

Credit reporting errors occur quite often (up to 21% of the time according to the FTC) and it is ultimately up to you to verify that the
information on your credit reports is accurate.

You should check your credit reports and if you discover that you have a judgment or anything else being reported incorrectly you can
submit a dispute to the credit bureau(s) asking for the item to be corrected or removed.

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ABOUT THE AUTHOR

John Ulzheimer
John Ulzheimer is a nationally recognized expert on credit reporting,
credit scoring and identity theft. He is the credit blogger for
VantageScore Solutions, JD Byrider, The Credit Solution Program , and
the National Foundation for Credit Counseling. Formerly of FICO and
Equifax, John is the only recognized credit expert who actually comes
from the credit industry.
View all posts

26 COMMENTS

Jeff Stephens
March 24, 2017 at 6:40 am

You know if there was enough public outcry about the horribly inconsistent world of credit reporting and EVERY
SINGLE TIME that errors are made by these credit bureaus they were held responsible for the costs pain and
suffering experienced by the consumer; then, and only then would we (the people) start to actually see a fair,
reasonable, and equitable credit system! As it stands right now THERE IS no continuity whatsoever! The credit
reporting bureaus are NEVER held responsible or accountable for errors on their part. In my case, I was deployed
and a charge came in. I was out of the country serving this country and a bill came in that I was never aware of.
Although, I had passed along my new contact information the company never got it forwarded on to their billing
 dept. So, bills that went out got returned as un-deliverable. It then have a lean placed against me and even though all
of this could be proven and I am supposed to be protected under the Service Members Civil Relief Act? I was not!
ALL of this because Credit Reporting Agencies are allowed to act with impunity. So., if Americans are tired of
them then Americans have to take action and go thru their representatives and perhaps then and only then would
this ridiculously inept system be fixed!
Reply

Carolyn B
February 20, 2017 at 4:54 pm

Judgement was removed from my credit karma in 2015. Havent checked actual credit reports. Hadnt received any
recovery letters until two weeks ago. How does one know if judgement was refiled b4 the 7years? I dont have any
paperwork to check. How do I get these letters to stop?
Reply

Mister K
January 2, 2017 at 7:38 am

With all the fancy algorithms and credit reporting services available, have they actually improved the delinquency
rates?
Reply

Susie
January 2, 2017 at 7:27 am

Hi, I have two judgements on my credit report, but have paid them both to the parties that filed them, Ive have
satisfied the debt, so am I able to have the judgements removed off my credit report?
Reply

Sam Uliano
January 2, 2017 at 9:37 am

Hi Susie,
Thanks for reading! Take a look at these three articles for help removing those judgements:
5 Things You Need to Know about Judgments and Your Credit
How to Remove Collection Accounts From Your Credit Report
4 Steps You Should Take to Fix Errors On Your Credit Report
Hope that helps!
Reply
 Scott Hardie
January 2, 2017 at 4:35 am

I was sued by a lawyer that I built the house for. The house was completed when finished and he took possession but
never made a payment to the bank that the house was financed with. The house was put on the market and was listed
for almost 7 months. When the house and did not sell he trumped up allegations and sued me for the entire price of
the house. I spent $70,000 of my own money defending myself but ran out of money. He then got a judgment from
us $320,000 of which I never got notice from the court that it had been filed. Can I get this removed sense it was
falsely Filed without my knowledge.
Reply

Sam Uliano
January 2, 2017 at 7:42 am

Hi Scott,
So sorry to hear about your situation! Take a look at these articles for help:
4 Steps You Should Take to Fix Errors on Your Credit Report
How to Remove Collection Accounts From Your Credit Report
I hope those help!
Reply

Susie
January 6, 2017 at 9:06 am

Hi Sam, thanks for responding. Upon rereading.. I believe I asked incorrectly on what to do. First off.. the
one judgement in question has no information on it.. not even a file date.. so I looked at my paper work and
found a letter from the collection company/attorney and they filed paperwork to the courthouse stating
Notice of dismissal with prejudice. So what Im asking is, can I get theverything judgement removed from
credit report? If so, do I start with the attorney?
Regarding my other judgement, it was filed, but I settled with collection company, so it never went to court.
The judgement states paid, can I have it removed or do I leave it alone?
I appreciate your time and look forward to hearing from you?
Susie
Reply

BERNELL J. LEBLANC SR.

November 18, 2016 at 1:54 am

THIS INFORMATION IS VERY HELPFUL

Reply
 Donald Evans
September 25, 2016 at 6:10 am

Is no pay, late pay on debit/credit cards the same? If so, I thought that after 7 years they could not put a new default
date. My understanding is that its against the law to do so.
Reply

Joseph Montanez
August 24, 2016 at 10:06 am

What about when the IRS put lean on your credit and a judgment how long does that stay in does that hurt your
credit really belly?
Reply

Michael Bradley
August 23, 2016 at 7:53 pm

What was the 4th thing I needed to know?

Reply

Sam Uliano
September 30, 2016 at 11:24 am

Hi Michael,
Thanks for reading! You will find the fourth and fifth items on this list on the next page of the article, which you
can find by clicking on the big, red 2 at the end of the article.
Reply

Herman Smith
August 23, 2016 at 4:59 am

Wheres #4? and5

Reply

Sam Uliano
September 30, 2016 at 11:24 am
 Hi Herman,
Thanks for reading! You will find the fourth and fifth items on this list on the next page of the article, which you
can find by clicking on the big, red 2 at the end of the article.
Reply

Carol kieblir
July 28, 2016 at 7:56 am

Hi. I filed bankruptcy 5 yrs ago. One of the creditors is listed as filed, but not satisfied, as the others are. There is a
notation of included in bk. Home loan officer said not the same and I had to send him bk paperwork. How would I
fix this at Experian, or the courts or both? Thank you for your time.
Reply

Gary Davis
August 22, 2014 at 8:05 pm

I had a judgement filed against me for an unpaid credit card in 2011. I later paid the card in 2012 and the
judgement/lien was released. On my credit report, the judgement is listed as filed but not released. Is there a
difference in how it is reported regarding how it affects your credit score? Should I send a copy of court records to
the 3 credit bureaus?
Reply

Brice Consultsnts
April 7, 2015 at 8:41 am

Gary now that the judgement is paidwrite a letter to the courthouse along with the docket number asking for it
to be expunged/removed from the docket. Once removed ..write to the bureaus explaining that theres no
judgement on file ..to please remove the account from your files ASAP and send you confirmation upon doing
so. And that should remedy that situation.
Reply

Michael Taitt
August 13, 2014 at 1:35 am

Very good Information

Reply

Joseph W Kerger
August 11, 2014 at 4:35 pm

The problem with a PR is no matter how great your salary and even with a perfect payment history along with
excellent CC relationships, a PR is a 7 year prison term for your FICO score which is just ludicrous and overkill
PERIOD!
Reply

Chad Ver Mehren

August 4, 2014 at 10:05 pm

So whats next counter sue them for defamation, slander etc.?

Reply
 Saleem Bakir-Bey
August 4, 2014 at 4:50 pm

Thanks for sharing your vast knowledge on one of the most relevant subjects in the country today!
Reply

Oliver Robinson
August 4, 2014 at 3:20 pm

Good information thank you

Reply

Joseph W Kerger
August 4, 2014 at 3:20 pm

Unless its a judgment directly related to a business creditor, it is 100% EVIL and totally underhanded for reporting
to CRAs to harm a consumers otherwise great credit and should never be allowed. Example: An individual, ex
gf/bf etc. demands more then they u actually owe AND YOU HAVE PROOF! You MUST let it go to court and
defend your rights. The civil court agrees with you on the amount, but guess what? In defending yourself from being
extorted NOW YOU HAVE A Public Record JUDGEMENT THAT UNFAIRLY PENALIZES YOUR CREDIT
SCORE. This nothing less than a travesty of justice tilted to harm the innocent.
Reply

Renee Ison Henson

July 26, 2014 at 3:05 am

I appreciate you freely sharing your expertise on the confusing world of credit.
Reply

Shanon Dockery
July 24, 2014 at 8:05 pm

I love your post very informative