Information on your credit report can have a negative effect on your overall score. Low scores make it difficult to get loans and credit cards, while a high score puts you in a prime category for loans and other financing. Judgments on your report can remain for seven years and bring down your score, but paying a judgment and getting the entry off your record can help your score.
What is a Judgment?
Credit judgments can appear on your credit report after you lose a lawsuit to a creditor. Creditors can file lawsuits to collect on a debt, and if a court rules in the creditor's favor, a judgment can appear on your report indicating that you owe a creditor. Judgments are negative entries and hurt your credit score. With a judgment, a mortgage lender or auto lender may deny your request for a loan, or require that you satisfy or pay the judgment before issuing an approval.
Paying a Judgment
Paying a judgment doesn't automatically lift the negative entry from your credit reports. Paid judgments can remain on your credit report until they age and fall off your record--about seven years. Having a judgment on your record indicates past credit issues; and even if you pay a judgment, some lenders and creditors may hesitate to offer financing. For this reason, it's important to negotiate with lenders to get a paid judgment off your record completely.
Written Letter
While paying a judgment doesn't guarantee removal of the information from your report, you can write your creditors and request removal of a paid judgment. If you haven't submitted a payment yet, write a letter to your creditor and mention your plans to satisfy or pay the judgment. Include your name, address, account number and balance owed. As a bargaining tactic, agree to pay the judgment only if the creditor agrees to remove the judgment completely from your report upon receipt of the full payment. If they agree, ask for written confirmation, and wait for their response before mailing your payment. If you've already paid the judgment, you can also submit a written request to have the entry deleted. Understand, however, that creditors aren't obligated to comply with these requests.
Credit Report
Creditors must contact the credit bureaus to update and remove a paid judgment from your record. If the creditor agrees, allow time for them to contact the bureaus, and then after a few months, order free copies of all three credit reports from Annual Credit Report. Check the reports to ensure removal of the information. If the information remains on your report, contact your creditors to see when they plan to update your report.
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