Judgments occur when you are taken to court in order to recover a debt. This can happen by either the original creditor or a debt collection agency. If the ruling goes against you, then it can appear on your credit report.
Yet, it has become harder for judgments to be listed on credit reports. It is because of the new requirements found in the National Consumer Assistance Plan (NCAP). This is a document agreed to by Experian, Equifax, and TransUnion regarding transparency in credit reporting.
When a judgment is listed on your credit report, you can have it removed.
Removing a judgment
There are several options you have if you want a judgment taken off your credit record.
Dispute the judgment
Look closely at the information contained within the ruling. If there are mistakes, you can challenge the judgment.
Errors that can occur are:
● Wrong identity
● A mistake was made in the processing of the judgment
● You have settled the debt
● The creditor has closed the business down
In the documentation that the court provides you look for inaccuracies, These could be
● The amount being claimed is wrong
● Spelling errors
● Wrong dates
Send a letter to the credit bureau indicating why you are disputing the judgment. Include a list of the errors you have identified. The credit bureau has to investigate the dispute and let you know the outcome within 30 days.
Validate the judgment
With this, you are asking the court for evidence that the judgment took place. Send a letter to the court and ask for them to send you proof. You will need to supply the court with your personal details and the case number.
If you don’t get a response back from the court, or they can’t validate the judgment, ask for it to be taken off your credit report.
Pay the debt
Another option to have the judgment taken off your report is simply to pay what’s owed. In some states, once the debt is settled the judgment is removed. In others, you will have to wait for seven years.
How do judgments affect my credit score?
As we mentioned, the NCAP no longer requires judgments to be listed on a credit report. However, if a judgment does appear it can cause your credit score to drop by 150 points.
Additionally, it sends a warning out to other lenders to be careful in providing you with credit.
A judgment is a court ruling against you to pay your debt. Though they are no longer required to appear on credit records, they can still be listed in some circumstances. When that happens it can have a dramatic effect on your credit score.
You can dispute the judgment by providing evidence to a credit bureau of the mistakes made. Also, you can ask the court to validate the judgment. If the court fails to do so, you can request that the judgment be taken off your record.