Creditors can seek a judgment against you for failing to pay what you owe. A judgment can significantly hurt your credit profile. If you have a judgment on your credit report, getting it removed is important so that you can start rebuilding your credit.
What is a Judgment?
A judgment takes place when you do not pay your bills and your creditor sues you. When the lawsuit is filed in the local court system, you have to appear in court or a default judgment will be entered against you. On your court date, the judge will hear the evidence against you and unless you can prove that you did not accumulate the debt, the creditor will win the case. Then the creditor can use the judgment to collect from you through a wage garnishment or a bank levy.
Getting to a Judgment
Before a creditor files a lawsuit for a judgment, several steps occur. For example, you typically have to be at least three or four months late on your payments before the creditor files suit. If you get to 30 days late on a payment, it can hurt your credit by as much as 110 points, according to CNN Money. By the time the account gets to 90 days late, it hurts your credit by as much as 135 points. Then when the actual judgment is placed on your record, it could drop your score by 50 to 150 points, depending on how high your score was to begin with.
Judgment Section
Besides the impact on your credit score leading up to the judgment, the judgment itself also damages your credit. The judgment stays on your credit report for seven years from the time that it is entered against you in court.
Removing the Judgment
If you have a judgment on your credit report, try to have it removed. When you pay off the judgment, you may be able to negotiate with your creditor to get it removed. In some cases, the judgment is still not removed. If you check your report and an old judgment that is satisfied is still on your report, you can dispute the item with the credit bureaus and get it removed.
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