How Long Does a Satisfied Judgment Stay on Your Credit Report?

A credit judgment on your credit report can negatively impact your ability to get loans and various other types of financing. Derogatory items on a credit report have long-term consequences. But if you receive a judgment on your personal credit file, you have the option of paying the judgment and satisfying the debt. Even after you pay a judgment, the information can remain on your credit report.

Definition of Judgment

If a creditor or lender files a suit, you can appear in court to dispute the lawsuit. But if a judge determines that you owe the money, he places a judgment on your credit file. Consequences of a credit judgment include a decrease in your credit score, more credit rejections and higher interest rates on your loans.

Benefits of Paying a Judgment

Ignoring an unpaid judgment on your credit report and refusing to pay or satisfy this debt harms your credit history. Benefits to satisfying a judgment, or paying the debt, include the ability to qualify for future loans. Future lenders checking your credit history will see the judgment. However, after satisfying the debt, your previous creditor or lender should update your report and include the note, "paid or satisfied judgment." This provides evidence that you paid the creditor, and this responsible action can open the door to new financing opportunities.

Satisfied Judgment and Credit Report

Paying or satisfying a judgment doesn't guarantee instant removal. In fact, a satisfied judgment can remain on your credit file for seven years. Even though a paid judgment stays on your report, the fact that you paid the debt is advantageous when applying for mortgages and auto loans. You can include an explanation on your credit report highlighting the reason for the judgment such as lack of income from a job loss or illness. Knowing the cause of past credit issues can persuade a lender to approve your application.

Removing a Paid Judgment

If you've already paid a judgment, you can request the removal of this negative item. Understand however, your creditor or lender doesn't have to remove the judgment. It never hurts to ask, though.