Understanding how long a judgment stays on your credit report is important for managing your finances. Judgments can have a significant impact on your credit score and can remain on your report for years. In this article, we’ll explore the factors that determine how long a judgment stays on your credit report and what you can do to minimize its impact.
What Is a Judgment?
In a debt lawsuit, a judgment happens at the end of the case, either in favor of the plaintiff creditor or the defendant debtor. The judgment that results from the case is an official court document, which means that it’s also a public record and something that can be accessed by potential creditors, employers, landlords, and many others. Judgments that are not addressed can last ten years or more under Texas state and federal laws.
How Do Civil Judgments Appear on Credit Reports?
In recent years, the answer to this question has changed. Before 2017, judgments routinely appeared on credit reports in the public records section at the beginning of most reports. However, as part of a settlement agreement stemming from multiple class-action lawsuits, the three major United States credit bureaus of TransUnion, Experian, and Equifax all agreed to stop displaying judgments on their reports. This has generally remained the status quo since the class action lawsuit was settled.
There are a few other essential things to know about credit reports. In the United States, each of the three major credit bureaus will sometimes collect credit information that’s inconsistent with the findings of the other agencies, that is a misinterpretation, that requires additional information, or that’s simply incorrect. As such, it’s important to keep an eye on these bureaus and what they are reporting.
If you see something that is incorrect, you may dispute an outstanding judgment on your credit report for such reasons as the debt was paid, the debt belonged to someone else, or the time that the debt was supposed to be permitted to appear on your report has passed.
How Long Does a Judgment Stay on Your Credit Report?
Do civil judgments appear on credit reports under state laws? A judgment can remain on credit reports for as long as it is active or valid. In the State of Texas, judgments are considered valid for at least ten years, after which time the creditor can undertake relatively easy efforts to have judgment renewed for another ten years, and then another ten years after that, and so on. This means that the judgment could remain on your credit report potentially forever unless or until you settle it or pay it.
Do judgments show up on credit reports under federal law? Under federal law, specifically the applicable Fair Credit Reporting Act (FCRA), the general rule is that bad debts can remain on your credit report for seven years.
How to Remove a Judgment from Your Credit Report
A creditor generally has two options to remove a court judgment on a credit report and ensure it doesn’t have a negative effect on your financial future. The first is to file to vacate the judgment with a court. However, this can be extremely difficult, especially if the judgment was entered because of a default judgment (such as a failure to appear or defend in the lawsuit).
The second way to remove a judgment is to obtain a release of the judgment, which is filing a document with the court showing that the debt has been satisfied either by being paid off or settled. Although this is not guaranteed to remove the history of the judgment from public records, it will come off of your credit report as an active or valid judgment, a positive for your financial future.
Get Legal Help from the Law Offices of Seth Kretzer Today
When dealing with credit judgments, the creditor is always in the driver’s seat because they already have a judgment against you. This is why working with an experienced judgment attorney is the best way to handle having a creditor judgment removed. At the Law Offices of Seth Kretzer, our attorneys are highly skilled and experienced with creditor judgments and can answer your questions and help you with your legal needs.
