A credit report is a vital piece of a consumer's ability to get new credit or loans. Having a judgment appear on a report can be devastating, especially because the item can remain for many years.
Basics
A judgment is a court ordered result of a lawsuit. When a creditor sues a debtor to recover unpaid funds, a judgment in favor of the creditor means the court has ordered the debtor to pay up.
Length of Time
A judgment can remain on a consumer's credit report for up to seven years, according to the Fair Credit Reporting Act. Though erroneous information can be removed, judgments cannot be removed before the seven years expires.
Errors
If a judgment is wrongfully listed on a credit report, consumers do have a way to modify it. Erroneous entries can be removed after a consumer contacts the credit reporting bureau and provides evidence to prove that the item is a mistake.
Collections
Creditors victorious in a judgment have a limited amount of time in which they can collect the money. Each state determines its own time limits (referred to as the statute of limitations), which vary between three and 20 years.
Impact on Credit Score
A credit score will be hurt by a judgment. While the damage can be significant, consumers can begin rebuilding their credit score soon after simply by engaging in responsible credit behavior.
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