Your credit score is sure to drop once a judgment is added to your credit report. A judgment will remain on your credit report for seven years, according to the Federal Trade Commission, and cannot be removed sooner. The only remedy for the judgment is the passage of time, the FTC reports. The judgment will have less impact on your credit as it ages.
Credit Score
Your credit score is based on the information on your credit report, and your score will drop once the judgment is recorded. How much your score will drop will depend on the other information on your credit report, according to Bills.com. Excellent credit before the judgment could lead to a big drop in score, according to Bills.com, but the drop may not be as severe if your credit was already bad.
Creditworthiness
A civil judgment for an unpaid debt could make other lenders reluctant to lend to you -- especially while the judgment is recent. Because of the judgment, you could be forced to pay higher interest rates for credit cards and other loans. A mortgage lender could insist that you pay off the judgment before being approved for a home loan.
Account Closure
Your current creditors may freeze your credit lines at the current balances or close your credit card accounts once the judgment is added to your credit report. Most credit agreements give creditors the right to periodically review your credit, and a judgment could indicate that you are having severe financial problems. As a result, other creditors may start closing your accounts for fear that you may default on those agreements as well.
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