Are judgments listed on your credit report?

Disclosure regarding our editorial content standards.

Judgments don’t actually appear on your credit report. However, if you have a judgment issued to you for a debt you owed, you likely have other derogatory records on your credit report related to the account. Find out more about judgments and related negative marks and how to get them off your credit report below.

What is a judgment?

A judgment is a legal court decision that decides a dispute between two parties. If you owe a debt and don’t pay it as agreed, the lender may eventually file a lawsuit against you. If the lender wins the lawsuit, a judgment is entered against you. This provides the lender with the legal authority to seek liens and garnishments to recoup money you owe. 

Typically, by the time an account is to the stage involving a lawsuit, you’re already past due—often by a few months or more. On top of a judgment, then, you may already have past-due payments, charge-offs and collection accounts on your credit report.

• Past-due payments show up when you don’t pay your credit payments on time. Lenders can report as soon as you’re 30 days past due. Your credit report shows whether you’re 30, 60, 90 or 120+ days past due.
• A charge-off occurs when a creditor writes off the balance you owe and closes your account because it doesn’t think the money is collectible. You still owe the money; it’s just not on the creditor’s books anymore.
• A collection account shows up on your credit report when your account is so late it moves into collections. Often, a creditor that writes off your debt sells it to a third-party collection company and the collection agency tries to collect the debt.

How a judgment happens

When a creditor or lender files a lawsuit against you for an unpaid debt and wins, the court enters a civil judgment against you. Essentially, a judgment is the resulting decision of a lawsuit in which the borrower loses the case. 

A lawsuit could also be filed by a debt collection company your original lender sold your debt to. 

When the plaintiff (the party that files the lawsuit) wins a judgment against you, the court may approve additional ways for it to collect money from you. This could include:

• Garnishing your wages
• A court-ordered payment plan
• Attaching liens against your property

In some cases, this can mean creditors may have the right to seize property and sell it to satisfy a judgment. This might include bank accounts, cars or household possessions. However, they’re typically exempted from seizing your home, jewelry, clothing, or furniture.

What are the different types of judgment?

There are four main types of judgments. They include:

• Satisfied judgments. If a creditor gets a judgment against you and you pay what you owe them in full, the judgment is considered satisfied. You may also be able to get a satisfied judgment by negotiating with the creditor to pay less than what you owe but agree that the debt will be considered paid in full.
• Unsatisfied judgments. Unsatisfied judgments have not been paid in full or aren’t considered paid in full.
• Renewed judgments. Judgments don’t last forever. The statute of limitations on judgments varies by state, but in most cases, creditors that won a judgment previously can renew the judgment at least once to continue to try to collect on it.
• Vacated judgments. Vacated judgments make the previous judgment legally unenforceable. For example, if you appeal a judgment against you and the appellate court decides in your favor, the judgment is vacated.

Ways to get a judgment

There are three common ways a plaintiff can get a judgment against a defendant:

• Default judgment. A default judgment occurs when you (the defendant) don’t respond to the Summons and Complaint and don’t come to court for the trial. In this case, the plaintiff can win by default.
• Consent judgment. If the two parties involved in the lawsuit negotiate a settlement, it’s a consent judgment.
• Judgment after trial. If a trial is conducted and a judge or jury makes a verdict, the judgment is recorded as the final decision based on the verdict. 

How does a judgment affect your credit score?

Judgments themselves don’t appear on your credit report and don’t impact your score. The three credit bureaus made this decision in April 2018. This is a policy decision and not related to law, so the bureaus could change their minds at any time and start listing judgments again.

However, they’re still public record and can impact your ability to get credit in some cases. Plus, by the time you get to a judgment, you may have other negative marks on your credit report, such as late payments and collections activity. The end result is usually a much lower credit score than you would’ve had otherwise, making it difficult to get future credit such as auto loans.

How long will judgments stay on your credit report?

Judgments will not be listed on your credit reports. But negative information like late payments and collections activity can stay on your credit report for up to 7 years.

How to remove judgments from your credit report

Since judgments don’t currently appear on your credit report, you don’t need to get them removed. However, there are tactics you can use to get other inaccurate negative items off your report.

Dispute inaccuracies

Start by looking at your credit reports. Look for any inaccurate information, but especially negative marks that may not be correct. Some examples might include:

• Collections accounts that aren’t related to any debt you’ve ever had
• Inaccurate amounts owed on debts
• Accounts showing balances that you’ve already paid off
• Late payments showing where you made payments on time

You can dispute inaccuracies with the credit bureaus. They’re legally obligated to follow up with your dispute and investigate. If the entity that reported the information can’t back it up with documentation, the credit bureau should remove or correct the information.

Pay it and wait it out

If you have a legitimate collections account on your credit report, you probably can’t get it removed. Most creditors won’t change accurate information. However, they can put a note on your file if you present extenuating circumstances. This may not increase your credit score, but it can help tell a more favorable story about your credit history for future lenders.

You can also pay the account, as a paid account looks better than an unpaid one. It may also be slightly better for your credit. Once you do that, it’s a matter of waiting out the negative item. It’ll eventually roll off your credit report and becomes less impactful to your credit over time.

Settle for a lesser amount

If you can’t afford to pay all of what you owe on a collections account, negotiate with the creditor to pay a lesser amount in exchange for having the account considered paid in full. A settled account demonstrates you made some effort to pay and is better than an account with no payments at all. Again, you’ll then have to wait for the negative item to roll off your credit report.

How are judgments collected?

Judgments are typically collected via liens, levies and garnishments.

• Liens allow the creditor to seize your property and sell it to recoup losses.
• Bank levies or garnishments allow creditors to seize cash in your accounts.
• Wage garnishments allow creditors to take a certain portion of every paycheck until a debt is paid.

What if a creditor tries to sue you?

Being sued can be scary, and it may be tempting to ignore the issue because it seems so overwhelming. But that’s the last thing you should do. If you ignore a summons for a lawsuit and don’t show up for the hearing, the creditor will likely win a default judgment against you. That lets them move on to file for liens, levies and garnishments.

Here are some steps to take if a creditor tries to sue you:

• Read all the information carefully. Determine if you owe the money or not.
• Gather your records about the debt if applicable. Compare them to the information in the lawsuit.
• Answer the lawsuit in writing or by showing up in court. You may want to hire an attorney to help you with this if the amount is very big or you’re not sure how to proceed.
• Ask for verification of the debt. If the creditor can’t provide sufficient verification, they typically can’t get a judgment.
• If you know you owe the debt, consider negotiating with the creditor before the hearing date. They may be willing to take a partial payment and consider the matter closed because it saves them in court costs.

Knowing your own financial situation and the details of all your accounts is important. It helps you keep up with payments, avoid collections and lawsuits and confidently dispute inaccurate information on your credit reports. If you need help with credit report disputing, consider signing up for CreditRepair.com.

Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.