Can a Judgment Be Removed From Your Credit Report?

A civil judgment is a court’s formal decision in a financial dispute, typically requiring one party to pay another. When issued, it significantly impacts an individual’s financial standing. This legal pronouncement can appear on credit reports, influencing the ability to secure loans, credit cards, or housing. It signals increased financial risk to potential lenders. This article explores how a civil judgment can be removed from a credit report, outlining the conditions and processes involved.

Understanding Judgments and Credit Reporting

A civil judgment is a court order compelling a debtor to pay a creditor a specified amount of money. This can arise from unpaid debts, breach of contract, or damages awarded in a lawsuit. Once entered by the court, it becomes a public record, accessible to the public and often reported to credit bureaus.

Credit reporting agencies, like Equifax, Experian, and TransUnion, historically collected information from public records, including civil judgments. These entries appeared in the “public records” section of a credit report, separate from typical accounts. A judgment on a credit report could significantly lower a credit score, indicating a financial obligation that required court intervention.

Historically, civil judgments remained on credit reports for seven years from the filing date, regardless of whether they were paid or unpaid. However, significant changes occurred in 2017 and 2018 under the National Consumer Assistance Plan. The three major credit bureaus removed tax liens and civil judgments from credit reports if they lacked sufficient identifying information, such as a name, address, and Social Security number or date of birth. This led to the removal of most civil judgments, as many did not meet the enhanced data standards.

While most civil judgments are no longer routinely included due to these stricter data requirements, they can still appear if they meet specific identification criteria. If a judgment appears, its impact on creditworthiness remains substantial. Such an entry would generally remain on a credit report for seven years if it meets the reporting criteria.

Strategies for Judgment Removal

Addressing a civil judgment requires specific actions that may lead to its removal or modification on a credit report. One common approach is satisfaction of the judgment. This means the individual has paid the full amount owed or settled with the creditor for a lesser amount. Once the obligation is met, the court record should reflect the judgment’s satisfaction, making it eligible for updated reporting.

Another pathway involves vacating the judgment, meaning the court has annulled or set aside its original decision. This can occur if there were procedural errors, improper service of legal documents, or fraud. Vacating a judgment requires filing a motion with the court and presenting evidence to invalidate the original judgment. This legal action effectively erases the judgment.

An appeal of the judgment is a formal request to a higher court to review and potentially overturn the original decision. If the appellate court finds errors, it can reverse the judgment. A successful appeal means the judgment is no longer legally binding, leading to its removal from public records and credit reports. This process can be lengthy and requires adherence to strict legal procedures.

Individuals also have the right to dispute inaccuracies on their credit reports, including civil judgments. If a judgment contains incorrect information, such as an inaccurate amount, an incorrect date, or if it belongs to someone else, it can be challenged. Disputing an inaccuracy involves providing evidence to the credit bureau. For instance, if a judgment that should have been removed due to the 2017/2018 reporting changes still appears, it could be disputed based on insufficient identifying information.

In certain situations, a judgment may be discharged through bankruptcy proceedings. When an individual files for bankruptcy, certain debts, including some civil judgments, can be legally eliminated. If a judgment is discharged, it generally cannot be collected by the creditor, and its status on the credit report should be updated to reflect the bankruptcy discharge. This process provides a legal fresh start, though bankruptcy itself remains on the credit report for seven to ten years.

The Credit Report Update Process

Once a civil judgment is resolved through satisfaction, vacatur, appeal, or bankruptcy discharge, the next step is ensuring this resolution reflects on credit reports. Obtain official documentation proving the judgment’s resolution. This proof might include a “Satisfaction of Judgment” document, a court order vacating or overturning the judgment, or official bankruptcy discharge papers. This documentation must clearly identify the judgment and its resolved status.

With proof in hand, notify the major credit reporting agencies: Equifax, Experian, and TransUnion. If a judgment remains on a report due to meeting specific data standards, submitting proof of its resolution is the appropriate action. This involves sending a written request to each bureau, with copies of official court documents, explaining the judgment’s resolution and requesting an update or removal. The request should include personal identifying information such as full name, current address, and Social Security number to ensure the correct file is accessed.

If a judgment is inaccurately reported on a credit file, a formal dispute can be initiated with the credit bureaus. Review the credit report to identify specific inaccuracies, such as an incorrect judgment amount, an outdated entry, or a judgment that does not belong to the individual. Submit the dispute in writing to each credit bureau, clearly stating the inaccurate information and providing supporting documentation. Credit bureaus provide online dispute portals, but certified mail is often recommended for a clear paper trail.

Upon receiving a dispute, credit bureaus must investigate the disputed information within 30 days. They will contact the original source, such as the court or creditor, to verify accuracy. After investigation, the bureau will inform the individual of the outcome. If the information is inaccurate or unverifiable, it must be removed from the credit report. If the judgment is not updated correctly after resolution or dispute, individuals can file a complaint with the Consumer Financial Protection Bureau (CFPB).

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References

Consumer Financial Protection Bureau. “Consumer credit report public records data.” Last modified January 2023. Retrieved from https://www.consumerfinance.gov/data-research/research-reports/consumer-credit-report-public-records-data/
Consumer Financial Protection Bureau. “How do I dispute an error on my credit report?” Last modified November 2023. Retrieved from https://www.consumerfinance.gov/ask-cfpb/how-do-i-dispute-an-error-on-my-credit-report-en-314/