How to remove a judgement from your credit report?

A judgement is bad news for your credit report and your pocketbook. It’s the court’s formal decision from a lawsuit, and it allows creditors to garnish your wages. Creditors commonly sue delinquent debtors to collect the amount owed. But even a civil judgements from small claims court can appear on your credit report. If a court rules that you owe someone else money, you will see a judgement on your report.

Since judgements are public records, most people struggle to remove them from their credit report. But in some circumstances, you can remove a judgement. Below, we explain the details.

How judgements differ from other credit items

Judgements don’t share the same features as other credit items. First and foremost, they are public records- often unrelated to an outstanding debt. If you lose a case in small claims court, the judgement appears on your credit report. This happens even if you pay the judgement right away. A paid judgement is better than an unpaid one, but creditors always see judgements as a negative item.

Not only that, judgements are zombies; they keep coming back to life. Judgements against you don’t have to fall off your credit report in seven years. Creditors can renew a judgement against you up until the statute of limitations in your state expires. This can be 20 or more years.

These features give creditors more power to collect debts. A judgement allows a creditor used the full force of the law to get you to repay your debts. Collectors can even garnish your wages.

Under normal circumstances, your creditor might negotiate a pay for delete option. However, a judgement leaves you with limited negotiating power.

Finally, judgements are a matter of public record. Most of the time a judgement will contain accurate and properly characterized information. Unless a judgement has questionable features, you cannot remove it from your credit report.

What options do I have if I face a judgement?

If you face a judgement against you, you only have a few options.

The first is the most common route. Most people pay their judgement and wait seven years for it to come off of their credit report. Courts call this satisfying a judgement. A satisfied judgement has a negative effect on your credit score, but it looks better than an unsatisfied judgement. Lenders may allow you to borrow soon after you pay a judgement.

Second, you could discharge a judgement in bankruptcy. In this case, the judgement will stay on your credit report for seven years after you discharge it. You won’t pay a bankrupted judgement, but it looks bad on your credit report.

Third, you can attempt to vacate your judgement. This involves expunging the judgement from your public record. We will explain a bit more about vacating debts below. If qualify to vacate your debt, you should seek legal representation. You can send a record of the vacated debt to the credit bureaus, and they will remove it.

Finally, you can dispute a questionable judgement on your credit report in an attempt to remove it. It is not legal to dispute accurate information on your credit report. We recommend that you only dispute a judgement that is inaccurate or misleading. If a mischaracterized judgement haunts your credit report, we will give you the proper language to dispute it.

Vacating a judgement

Vacating a judgement means that a court voids a previous judgement against you. A court will not vacate a judgement unless they believe the judge unfairly issued the judgement. Courts vacate judgements when the defendant doesn’t receive proper papers. They also vacate judgements if the original suit wasn’t presented accurately.

Anyone can file a motion to vacate a judgement if they file before the legal time limit runs out. The time limit varies from state to state. In many states it is less than six months from the time the court issued the original judgement.

If you have grounds to vacate a judgement, it is your best option for removing it from your credit report. It is easy because a vacated judgement makes it seem like the judgement never existed. However, navigating the court system is daunting. You might not have grounds to vacate a judgement. We recommend seeking legal counsel before filing a motion to vacate a judgement.

Disputing a judgement

Most of the time, you have to vacate a judgement remove it from your credit report.

However, under certain circumstances you can dispute a judgement with the credit bureaus. If you dispute a judgement, the credit bureaus have 30 days to confirm the accuracy of the information. If they cannot verify it, they must remove it from your credit report. You succeed in removing a judgement that is incorrect, unverifiable, not legally recorded or otherwise questionable in nature.

Because judgements are complex, we recommend enlisting a legal expert to help you dispute judgements. This could include legal experts from Lexington Law who have experience disputing questionable credit items.

If you want to dispute these items yourself, you need to understand the precedent for disputing judgements.

In Carmen Dixon-Rollins v. Experian Information Solutions the court concluded that credit bureaus must investigate the accuracy of a negative credit item.  Credit bureaus must even verify beyond a public court case in certain circumstances. The circumstances include:

  1. When the consumer told the bureau that the original source may be unreliable.
  2. When the bureau knows that the original source is unreliable.
  3. When the the potential harm of inaccurate information outweighs the cost of investigation.

Because of these precedent, the following groups can dispute judgements:

  • People who settled a case before trial.
  • People who have no RECORDED judgement against them. (This sometimes happens in cases of default judgements).
  • People whose debt cannot be validated with a reliable original source.

If these or another questionable circumstance apply to you, follow these steps to dispute your judgement.

First, print off your credit report from each of the three credit bureaus. This video shows you how to review your credit report at AnnualCreditReport.com. You need to know the Judgement Record number that appears on your report.

Next, search online for judgement record in the court’s Recorded Documents. If you cannot find a record of the judgement then you can demonstrate that no such record exists. A recorded document and a case file are not the same thing. A real judgement shows up in your court’s recorded documents.

If you find a judgement record, compare it to your credit report. Any discrepancy the credit report and the court records presents a reason to request a validation of the debt. You can also dispute judgements where your personal records differ from the credit bureau’s records. Please note, if you have a recorded copy of the judgement do not provide it to the credit bureaus. They will use it to update their information rather than remove the judgement.

Finally, use the template letter below for your dispute.

[Your Name]
[Your Address]
[Your City, State, Zip Code]
[Date]
[Name of Credit Bureau]
[Street Address]
[City, State, Zip Code]To whom it may concern:

I am writing to dispute civil judgement  record # XXXXXX in my credit report. I’ve circled the judgement in question on my credit report.

I believe that the furnisher of this information provided inaccurate information to you. Please validate the information.

[Choose one of the three options]

[If you do not think the information can be validated add the following sentence. Please send me the documents that demonstrate that it was me who owed $XXXXX to Plaintiff Name as a result of a the recorded judgement.]

[If a recorded judgement does not exist add the following sentence. A recorded judgment # XXXXX dated mm/dd/yyyy from [Court’s name] does not exist.]

[If you settled outside of court add the following sentence. This matter was settled outside of court and did not result in a judgement against me. I’ve attached evidence of payment and a settlement letter demonstrating the settlement.]

If you cannot verify the accuracy of the data, please remove the judgement from my report.

If the entry is verified, please provide me with the name and address of the information provider and the manner in which it was provided. I need this information to pursue any other legal recourse.

Sincerely,
Your name.

Enclosed: [List any enclosures. Remember, don’t include a certified copy of court records]

You will need to send the letter to all three major credit bureaus using certified mail. Keep a copy of the letter for your record.

The credit bureaus have 30 days to validate the debt with the original source, or they must remove it.

If no questionable circumstance applies, you need to wait seven years for the credit bureaus to remove a satisfied judgement from your credit report.

Is removing a judgement worthwhile?

Only you can decide if disputing a judgment is worth it to you. No matter what, removing incorrect information is only one part of fixing your credit. You could pay to enlist the experts at Lexington Law to dispute for you, or you could choose to move on.

Of course, if you don’t need new credit for a few years you can simply focus on building excellent credit behavior. Continually monitoring your credit score, and improving your credit behavior is the most important thing you can do for your credit score.