A judgment is a legal case of action taking against someone by a creditor who has not received payment. If a person goes an extended period of time without paying their debt to the creditor, the creditor has the right to sue to recollect the debt. Those who are served with court papers as the result of debt should never ignore them. When the case goes before a judge and the debtor loses the case, the judge will place a judgment on the credit report to reduce the score and alert other creditors to the issue with the people who are being sued.

How Judgments Affect a Credit Score

Judgments are extremely negative on a credit report. They show potential creditors borrowers have not been responsible with their previous debt obligations, and as such, lower the score to a point where it is next to impossible to get credit extended.

It can be difficult to obtain credit for a credit card, an auto loan or even a mortgage if there are judgments on a credit report. As each judgment could reduce the score by up to 100 points, even one has the potential plunge excellent credit to fair. Fair credit will almost always plummet to bad. As time passes after the judgment, it will not affect the score so adversely, though it will still cause difficulty when applying for credit.

Depending on the state a debtor lives in, and the statute of limitations for that state, the judgment may stay on a credit report for seven years, or the length of time allowed by statute, whichever is longer. In California, for instance, a judgment may stay on file for 10 years, and be renewed for another 10 years, for a total of 20 years.

Credit Repair Options after a Judgment

Just by paying off a judgment doesn’t mean you will improve your credit scores. Satisfied (or paid) judgments can be removed from a credit report, but this does not mean they will be automatically removed. This is why many people who have paid all their judgments still suffer from a bad credit rating. Even non-paid judgments can be removed from your credit if you know how.

While it is possible for a person to do his or her own credit repair, it is a difficult process to undertake alone, which will entail a lot of time and research.  Dealing with the credit bureaus directly does not usually prove helpful for most private citizens. This is why many people hire a credit repair firm to assist with removing judgments to improve an overall credit rating quickly.

Lexington Law Firm has been in business for over 19 years, having served over 500,000 clients in that time. They have removed 1,013,469 negative items from their client’s credit reports in 2009 alone. Here are some of their statistics from last year:

Items removed from credit reports:

• Bankruptcies: 9,713
• Charge Offs: 158,531
• Collection Accounts: 485,147
• Foreclosures: 2,567
• Judgments: 28,564
• Late Payments: 213,538

Visit Lexington Law’s website or call 800-496-3604 to speak with a credit professional from Lexington law about your situation now.

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