What Does "Satisfied Judgment" Mean on Credit Report?

Seeing "satisfied judgment" on a credit report is a Catch-22: You did the right thing by settling the matter, but it still damages your credit for years to come. Satisfied judgments are not always easy to prove, and sometimes you must file a lawsuit because a court reports the case as unsettled. Wait out the judgment and it will eventually vanish from your credit record.

Identification

"Satisfied judgment" on a credit report means you paid off a court-ordered settlement. This usually occurs when you have a account, such as a credit card balance, and the creditor takes you to court to gain the legal right to pursue your assets to repay the debt. Once you pay the balance, you must return to court and prove you paid the creditor. Usually, the credit bureaus automatically pick up a satisfied judgment, but it may take a few months to appear this way on your report.

Benefits

Changing a judgment from unsatisfied to satisfied boosts your credit score, although any judgment hurts your score overall, according to Don Taylor of Bankrate. It also means the creditor can no longer go after your bank accounts or receive a wage garnishment. Some states allow a creditor to renew a judgment forever, so it is better that you took care of the matter instead of letting it affect your credit potentially for decades.

Considerations

Once you get to the point that the judgment appears as satisfied, you cannot legally remove it. If you had dealt with the creditor before the judge issued an opinion, you possibly could have negotiated a dismissed judgment, which effectively nullifies the case. Since you paid the amount owed, you hold no leverage to remove the account.

Tips

You can remove a satisfied judgment if it belongs to someone else by disputing it with the credit bureaus. Alternatively, you could go back to the courthouse that held your trial and ask for an Order to Show Cause. Some judgments stipulate that the courts will dismiss record of your judgment if you pay it off. You could also dismiss the judgment if you were sued in error.