If someone sues you for unpaid rent or medical bills, a loan default or damages in a civil suit and the court rules against you, the court will issue a judgment stating the amount of money you owe. Credit bureaus collect information about judgments, as they do about tax liens and bankruptcies, and having this information on your report damages your credit rating and could prevent you from obtaining a loan. Removing a judgment from your credit report will improve your credit score and make you more attractive to lenders.
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Length of a Judgment
If you do nothing to remove a judgment from your credit report, it will stay on your report for seven years or until the statute of limitations runs out, whichever is longer. The statute of limitations for judgments is 10 to 20 years, depending on the state in which the judgment was issued. The judgment could remain in effect much longer, because the creditor has the option to return to court and ask for an extension if the judgment remains unpaid. At any time during that period, your creditor could execute the judgment by garnishing wages or your bank account.
Dealing With Credit Agencies
The three main credit reporting agencies -- Experian, TransUnion and Equifax -- may not necessarily maintain identical information about you. Obtain a current credit report from each agency and see if each one has the judgment listed. You are entitled to a free credit report from each agency once a year. To remove a judgment, you'll have to contact each agency and make your case for removing the judgment. Contact each agency via certified letter. You want to have a written record of your contact with the agency and verification that it received your communication.
If you paid the judgment in question, it should have been removed from your credit report automatically, but sometimes this is overlooked. Write to each credit agency and provide all the information you have about the paid-off judgment, including copies of receipts, the date the judgment was paid and any communication from the court that issued the judgment showing the pay-off.
If the statute of limitations for your judgment has expired and the person or business that filed the judgment hasn't returned to court to renew it, you can dispute the judgment and have it removed from your credit report. If the person who filed for the judgment has died, or the business you owed money to no longer exists, this is also grounds for having the judgment removed. Research your state's laws to determine in the statute of limitations has expired for your judgment and reference this law in your letter to the credit bureaus. An obituary or notice of a business closing will back up any claim you make that the person or business to whom you owed the debt no longer exists.
Other Reasons for Removal
Rarely, a judgment will show up on your credit report that is erroneous because a mistake was made in recording the Social Security number or the judgment belongs to a person with the same name. Whenever you dispute anything on your credit report, including a judgment, the credit bureau has 30 days to respond.