When Is a Judgment Placed on a Credit File?

A judgment is placed on a credit report, or file, after it is recorded in court records. Major credit bureaus such as TransUnion, Experian and Equifax subscribe regularly monitor court records and automatically add credit-related information to credit reports. The agencies review court records for judgments, bankruptcies, tax liens and more.

Definition

A judgment is a legal decision signed by a judge. The judgment requires you to pay a certain amount of money to a person or company that filed a lawsuit against you. Judgments are common in credit card debt, with judgments ordering people to pay the balance remaining on the account plus court costs and attorney fees. The amount due and the date of the judgment will be listed on your report.

Time Line

The credit bureaus will place the information on your credit report as soon as they receive it. The judgment could be added in a few days or a few weeks. The lawsuit leading to the judgment is not added, although it is also a part of the public record. However, for credit reporting purposes the lawsuit is just an allegation, and the credit bureaus are focused on recording the most factual information possible.

Credit Score

Judgments can cost a big drop in your credit score. Multiple judgments are even more damaging because they indicate that you are having severe credit problems. This will make it difficult or impossible for you to obtain new credit at competitive rates. Rushing out to add new credit before the judgment appears on your credit report may not work either. Chances are your credit is already poor if debt collectors are seeking judgments against you. Lawsuits are usually a last resort for debt collector and by the time a lawsuit is filed you may have already missed multiple payments causing your credit score to plummet. Failing to make payments usually results in the account being closed and listed on your credit report as charged off -- another very negative credit event that labels you as a high-risk borrower.

Removing Judgments

There are few options for removing judgments, which can be listed on your credit report for seven years. One possibility is returning to court to ask the judge to vacate or remove the judgment because you were unaware of the lawsuit or did not owe the money. Paying the judgment will result in your credit report being updated to show the listing as a "paid judgment." By this time your credit score is already damaged and paying the judgment will not provide an immediate boost to the score. However, a paid judgment allows you to resolve the debt and start rebuilding your credit.