Can an Original Creditor Remove a Judgement From a Credit Report?

Monetary judgments for unpaid credit card debt are damaging to credit scores. The information is reported on credit reports for seven years, making it difficult to qualify for new credit at favorable interest rates during that time. Original creditors are unable to remove judgments from credit reports because the information is obtained by the credit bureaus from court records. That means the creditor is not involved in the posting of judgment information to credit reports.

Process

Credit bureaus obtain credit information from a variety of sources, including the courts. Major credit bureaus -- Experian, Equifax and TransUnion -- purchase court records through third-party sources. The companies review public information such as bankruptcies and judgments and forward the details to credit bureaus. Credit bureaus then add the information to credit reports.

Federal Law

The Fair Credit Reporting Act, a federal law, requires credit bureaus to list judgments for seven years, and there are no provisions for removing the information earlier unless it is wrong. Credit repair agencies sometimes promise to remove judgments in a little as 30 days, but the Federal Trade Commission reports that there is no legal and ethical way to do so.

Challenges

The Fair Credit Reporting Act gives people the right to challenge anything on their credit report, even if the information is true. That means people can right letters to credit bureaus questioning a judgment on their report. They can argue that the information is wrong and that the credit bureau must remove it. The credit bureau is allowed by law to conduct an investigation lasting up to 30 days, and must remove the judgment if it cannot confirm that the information is correct. Some credit repair firms exploit the loophole, but judgments and other court information on credit reports is usually easy for the credit bureaus to confirm.

Settlement

Settling a debt out of court prevents a judgment and is the best strategy for avoiding additional damage to credit reports. Some people receive default judgments after failing to show up for court hearings or failing to provide written responses to debt lawsuits. Default judgments are automatic when people fail to defend themselves in the lawsuit.