Do judgments show up on your credit report?
A lot of factors can affect your credit score, including negative items on your credit report. Historically, among those negative items that used to show up on your report were judgments, which are legal documents indicating the results of a lawsuit. However, according to the Consumer Financial Protection Bureau, judgments no longer appear on your credit report as of 2017.
In this article, you will learn:
- What a judgment is
- Different types of judgments
- If judgments affect your credit score
- If judgments affect your ability to borrow
What is a judgment?
A judgment is a type of public record that comes about as a result of a lawsuit, such as debt collection. It's a legal document that shows the final decision about the collection. It also highlights the responsibilities and rights in regards to the debt for both you and any creditors.
Judgments used to appear on your credit report as a negative item or derogatory remark, meaning they would only fall off your report after 7 years. While they no longer appear on your credit report and do not directly affect your credit score, judgments can have an indirect impact on your credit score and overall financial outlook.
Different types of judgments
Judgments can be broken down into several different types, depending on the financial situation at hand. These include but are not limited to:
- Satisfied judgments—where the debt you owe has been settled/paid off
- Civil judgments—the final decision made by the court in regards to a civil lawsuit
- Unsatisfied judgments—where the debt remains unpaid
- Vacated judgments—these debts are dismissed after an appeal in court
- Renewed judgments—where a creditor seeks to collect debts from you again (otherwise known as a refiled judgment)
- Summary judgments—these are executed without a trial
- Monetary judgment—this refers to monetary compensation, or the specific funds/amount of money involved in the lawsuit
- Non-monetary judgment—there may be cases where, instead of money, repaying debt comes in the form of services/labor
Do judgments affect your credit score?
Since judgments no longer appear on your credit report, they do not directly impact your credit score. However, financial choices and behaviors that lead to having a judgment on your report may indirectly affect your score. You may have outstanding balances, debts, collections and more. If you have a record of missing payments towards your credit card bills, loans or other financial agreements—all of which could become a judgment in the future—you may already be hurting your credit score.
Even if you aren't in danger of judgments or other derogatory remarks, keeping an eye on your credit score can benefit your overall financial health. Enrolling in Chase Credit Journey® provides you with an in-depth view of where your credit stands and sends you notifications about any updates to your score or credit related information. Using tools like this can help you understand your score in more detail.
Collections and charge-offs
Collections or charge-offs, which are the result of missing payments consistently, can appear on your credit report as a negative item. This kind of financial behavior signals to the lender that you may come with risk, and it could be difficult to take out future loans, credit cards, secure low interest rates and more.
Do judgments affect your ability to borrow?
Because judgments no longer appear on credit reports, they won’t affect your ability to borrow funds. However, if you have a history of not paying your debts towards other financial agreements—such as credit card bills—you could face obstacles in getting approved for future loans. Lenders can still search for judgments in public records, which can impact your ability to borrow.
In conclusion
You don’t have to worry about judgments affecting your credit score directly, as they don’t appear on your credit report. However, to maintain good standing with lenders and other financial institutions, it's essential to pay back your debts when you can. Making regular payments towards loans, credit card bills and other financial agreements can help improve your credit score by enhancing your payment history and demonstrating your creditworthiness to lenders.
Remember, there are always tools to help you keep track of and build your credit score if you are in need of extra help or insight.
