A judgment is a court order representing the court’s final decision regarding a lawsuit. It details each party’s rights and responsibilities. Civil judgments are then entered into the public record.
If a judgment is entered against you, you are now legally obligated to pay the creditor the amount of the judgment. The creditor becomes known as a judgment creditor once they obtain this court order. Leaving a judgment unsatisfied can further affect your financial situation and limit your ability to get new credit.
Effect of Judgments on Your Credit Report
National consumer reporting agencies (NCRAs) — Equifax, Experian, and TransUnion — previously included public records on your credit report. This included judgments, tax liens, and bankruptcies. Having public records reported on your credit history could have adverse implications on your credit.
However, the three major credit reporting agencies have not reported judgments on your credit file since 2018. This means that a judgment doesn’t directly impact your credit score.
Overview of Judgments in Credit Reports
The change in practice resulted from a 2015 settlement agreement between the NCRAs and 30 State Attorneys General. After the settlement, the National Consumer Assistance Plan (NCAP) introduced new guidelines to strengthen credit reporting accuracy.
One change under the NCAP restricts which public records the credit reporting agencies could include in credit reports. Public records can only be included on a credit file if:
- The agency refreshes its data every 90 days, and
- There is enough identifying personal information to match the record to the correct consumer. This information includes your name, address, and Social Security number or birthdate.
For privacy reasons, civil judgments on public records don’t include identifiable information like Social Security numbers, home addresses, and dates of birth.
Since July 2017, civil judgments and tax liens have not been included on consumer credit reports following the introduction of the NCAP. Bankruptcies, however, are still included.
Federal Regulations Concerning Judgments on Credit Reports
It’s important to remember that the NCAP isn’t a federal regulation. The Fair Credit Reporting Act (FCRA), a federal law, sets guidelines for what can be reported and how long. Still, it doesn’t specifically prevent judgments from being included in a consumer report.
Additionally, only Experian, Equifax, and TransUnion agreed to remove judgments from credit reports. Judgments and liens may still appear on consumer reports produced by other credit reporting agencies.
Effects of Judgments on Your General Credit
A judgment doesn’t affect your credit report directly. However, your credit has likely been affected in the time leading up to having a judgment filed against you.
When debt collectors or creditors pursue unpaid debts, they routinely report negative information to the credit bureaus. This includes late payments, delinquencies, and defaults in your payment history. These negative marks are included on your report and lower your credit score.
The Consequences of Not Addressing Judgments
Ignoring a judgment can have long-term effects. Without satisfaction of judgment, judgment creditors can legally pursue other debt collection methods. Some of these tactics include freezing your bank accounts and wage garnishment. While the judgment remains unpaid, interest accrues daily, increasing your total debt owed.
An unpaid judgment can also limit access to opening new credit accounts, like a credit card or car loan. Lenders can check the public record for unsatisfied judgments and liens, which might affect your approval.
However, many judgment creditors will work with you on a payment plan rather than pursuing aggressive collection methods. Negotiating a payment plan can help you satisfy the judgment over time while avoiding wage garnishment or bank levies.
How Long Does a Judgment Last
How long a judgment is enforceable depends on its type and classification. The timeline also varies by the state jurisdiction that issued the court order.
Different Types of Judgments and Classifications
- Satisfied judgment: A satisfaction of judgment means the debt is fully paid.
- Unsatisfied judgment: An unpaid judgment.
- Default judgment: A judgment in favor of the plaintiff if a defendant doesn’t respond to a court summons or appear in court.
- Vacated judgment: A court dismisses a judgment due to an error in obtaining the judgment.
- Summary judgment: A judgment from a lawsuit that didn’t undergo a trial.
- Renewed judgment: A judgment that’s renewed to collect the unpaid debt.
Judgments can either be money or non-monetary judgments. Money judgments require you to pay the judgment creditor a specific sum of money. Non-monetary judgments require you to do or stop doing an action or behavior.
How Jurisdictions Impact the Duration of Judgments
Each state sets its own statute of limitations for different types of judgments, including money judgments. A statute of limitations is the duration of a judgment’s active and enforceable status.
In Oregon, the statute of limitations for money judgments is ten years after it’s entered. For comparison, money judgments can be executed in Alabama for 20 years.
How to Find Out if You Have a Judgment on Your Credit Report
Although judgments don’t show up on your reports from major credit reporting agencies, it’s good practice to check your report routinely. You might find credit reporting errors that are dragging down your credit. This can include closed accounts marked as open, duplicated debts, identity theft flags, and other negative information.
Request a free credit report from each national credit bureau at AnnualCreditReport.com. Review your credit report at least once a year to spot these errors.
If you find an error, contact the credit reporting agency directly to dispute it. You can call their support phone number, mail a dispute, or file it online.
Experian
- Call: (888) 397-3742
- File a dispute online
- Mail an Experian dispute form to:
Experian
P.O. Box 4500
Allen, TX 75013
Equifax
- Call: (866) 349-5191
- File a dispute online
- Mail an Equifax dispute form to:
Equifax Information Services LLC
P.O. Box 740241
Atlanta, GA 30374
TransUnion
- Call: (800) 916-8800
- File a dispute online
- Mail a TransUnion dispute form to:
TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19016-2000
Dealing with Judgments and Your Credit
A judgment from major credit reporting agencies won’t appear on your credit report, but it can still affect you meaningfully. Managing your finances responsibly and maintaining a good payment history is one way to avoid judgments in the future. But if you’re already dealing with a debt collection judgment, seek legal advice from a debt relief attorney to learn about your options to resolve the outstanding debt and eliminate the judgment.
Whether you’re struggling with paying a judgment or want to know your rights, the experienced debt relief professionals at Tayne Law Group may offer valuable guidance on dealing with your debt, whether business or personal debt, like credit cards or student loans. Call today for a free, no-obligation phone consultation at (866) 890-7337 or fill out our short contact form. Your information will never be sold, and all conversations are confidential.
