Having a judgment on your credit report is right up there with loan defaults and repossessions as one of the biggest hits to your credit score. The two worse items to affect your score are foreclosure and bankruptcy. You can see why removing a judgment from your credit is a big deal when it comes to repairing your credit. But, erasing a judgment is not that easy and it will take a bit of effort on your part. That is not to say it is impossible. Just be forewarned it is not as easy as removing a credit inquiry or a late payment from your credit history.
In this article we have tried to simplify the steps you will need to take to get a judgment removed. As with any credit repair procedure, you can do this yourself.
How Do Judgments Get on a Credit Report?
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 with someone filing a lawsuit against you for the debt. You should have received a Summons telling you when to show up to the 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 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. The judgment can be renewed 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 repor
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 because what Experian might report may be different from what TransUnion is reporting. You will need to handle each credit reporting agency separately and tailor your plan of attack to fit what each agency is reporting in your credit history.
Now that you have a current credit report and you have a list of what each reporting 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 courthouse. 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 Statute 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 overseas, 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.
The bottom line is, if you are sued, never let a default judgment be recorded. If you find yourself served with a Summons and Complaint from a creditor, you have nothing to lose by disputing the validity of the debt or maybe settling it out of court. Just ignoring the Summons will only give the creditor the win and you will be the ultimate loser with the damage the judgment will do to your credit. More often than not, if you call their bluff and make them prove their claim, they just might go away.