What do Judgements Mean?

Just as filing bankruptcy can hurt your credit score, so too can judgments on your credit card. A judgment is a decision made by a court when a bill goes unpaid. If the money you owe is past due, and all other actions by the company to whom you owe the money have been exhausted, then the court will make the determination and declare you liable.

How does a judgment affect your credit score? It can lower the score significantly. More specifically, if you apply for credit in the future the creditors will check your credit report, and decide you cannot qualify for credit because you still have an unpaid debt listed on the report.

If a judgment is listed on the credit report as open, this information can remain on your report for ten years. This also applies to bankruptcy filings. Having this judgment asserts that you not only fail to pay your bills on time, but that you are considered a risk for future loans or credit. This can have a detrimental effect on applying for a mortgage, buying a car, or needing any other type of loan or credit card. The odds are you will be turned down for any type of loan or credit card.

This is why it is so important to check your credit report annually. If there is any unpaid or open debt that resulted in a judgment, it is recommended that you pay the bill as soon as possible and then have it erased from the credit report. In addition, if you find there is a judgment on your report that may be incorrect, you can dispute it accordingly.

Anytime there are unpaid bills, it is a prudent course of action to contact the company involved and discuss payment options before it becomes a judgment on your credit report. However, in such cases you can make an arrangement with the creditor and once the bill has been paid they may agree to vacating the judgment via the court. Basically, all they have to do is state that the judgment has been satisfied and it can then be removed from your credit report. Note that under law, if there is no verification by the credit bureaus, the judgment must be removed from the report.

Therefore, if you have a judgment on your credit report, it is advised that you contact the clerk of the court in your state to determine the best way to obtain the necessary information, pay the bill, and then seek removal of the judgment.

Judgments on credit cards can be a stressful time. Not only does it damage your reputation, but it implies that you do not pay your bills on time and are considered a risk when applying for any type of credit. Thus, your credit score has no significant value.

If, in the worse case scenario, you were not successful in removing the judgment from your credit report, the only process by which you can repair the credit card score will entail applying for a debit card. Once you have shown that you can pay the bills on time, and do not over-extend your credit, you can convert the debit card to a credit card. This should take about one year.

Judgments on credit cards, like bankruptcy, carry a heavy toll on your credit score as well as the denial of any of future credit. Check your credit report annually, pay bills on time, and act expeditiously if any judgment has been declared by a court.