What Are Judgements on Credit Reports?

Civil judgments can impact an individual’s financial standing and future opportunities. These legal rulings, often a result of unpaid debts, have historically played a role in a person’s credit profile. Understanding civil judgments and their relationship with credit reports is important for anyone navigating personal finance. While reporting practices have evolved, the implications of a judgment remain a concern for consumers.

Understanding Civil Judgments

A civil judgment represents a formal court decision. It typically arises from a lawsuit where one party (plaintiff) sues another (defendant) for a financial obligation or debt. These judgments are distinct from criminal judgments, which deal with violations of law rather than financial disputes. A civil judgment legally obligates the debtor to pay the creditor a specific amount.

Common situations leading to a civil judgment include unpaid credit card debt, outstanding medical bills, or default on personal loans. When a borrower fails to meet repayment terms, the lender may pursue legal action to recover the money owed. If the court rules in the lender’s favor, a civil judgment is issued, formalizing the debt and granting the creditor legal avenues for collection.

How Judgments Appear on Credit Reports

Civil judgments were historically routinely included on consumer credit reports by the major credit bureaus. This practice provided lenders with insight into a borrower’s financial reliability. However, reporting standards changed significantly as of July 2017 due to the National Consumer Assistance Plan (NCAP). Under this plan, many civil judgments are no longer routinely included on credit reports.

The change was implemented because civil judgments often lacked sufficient identifying information, such as Social Security numbers or dates of birth, leading to inaccuracies where judgments were incorrectly attributed to individuals. Consequently, bankruptcy is now the only public record information consistently collected and reported by national credit bureaus. While civil judgments do not appear on credit reports now, they remain a matter of public record. Lenders and other entities may still search public court records directly to find this information, which can influence their assessment of a borrower’s creditworthiness.

Lifespan and Removal of Judgments from Credit Reports

Historically, civil judgments remained on credit reports for seven years from the date they were filed, even if the debt was paid sooner. This reporting period was established under federal law, such as the Fair Credit Reporting Act (FCRA), which governs how long certain negative information can stay on a credit report. Even if a judgment was satisfied or vacated, its entry on the credit report persisted for the full reporting duration.

However, the change implemented in July 2017, where civil judgments are no longer routinely included on credit reports by the major bureaus, alters their “lifespan” on these reports. For judgments entered after this date, they are not added to credit reports. For older judgments present before this change, they would have been removed from credit reports if they lacked the required identifying information or if the seven-year reporting period had elapsed. The underlying public record of the judgment still exists in court files, but its presence on a consumer’s credit report is no longer standard.

Accessing Your Credit Report for Judgment Information

To determine if any judgment information appears on your credit report, obtain copies from all three major credit bureaus: Experian, Equifax, and TransUnion. While civil judgments are no longer routinely reported, checking your reports regularly helps ensure accuracy and identify any potential errors. Each bureau may have slightly different information, making it beneficial to review all three.

The official, federally authorized source for obtaining free annual credit reports is AnnualCreditReport.com. This website allows consumers to request one free copy of their credit report from each of the three nationwide credit reporting companies every 12 months. You can access these reports online for immediate viewing, or request them by phone or mail. This resource is valuable for monitoring your financial data and understanding what information lenders may see when assessing your credit.