We live in tough economic times. Many honest, hard-working people find themselves falling behind on their monthly payments to creditors simply as a matter of course. If on top of that an unforeseen adversity occurs in their lives – the loss of a job perhaps, or a serious illness requiring hospitalization and expensive medical treatment – they may stop being able to make those payments altogether.
When that occurs, the creditor has the option of taking you to court and obtaining a court order to try and force you to repay that debt. Such an order is called a credit judgment. If you have made no move to answer your creditor’s concerns before the judge, the order may be served in your absence in which case it is known as a default credit judgment.
A credit judgment is a black mark on your credit history. It can lower your FICO score by as much as 250 points, and it can remain part of your credit report for up to 20 years should your creditor decide to renew the judgment. Even if the judgment is paid in full, it can remain in your credit history for seven years.
If you have a credit judgment against you, does that mean you should give up hope of ever being found credit worthy again? Not at all. There are many ways to dispute a credit judgment successfully and have it removed from your report.
Your first step should be to obtain copies of your credit history from the three major credit reporting agencies, Equifax, TransUnion and Experian. Studies have found that as many as 80% of all credit reports contain procedural or other kinds of errors. These errors can be the basis for a successful dispute.
Once you obtain your credit reports, review the information associated with the credit judgment carefully. What is the statute of limitations for the state the judgment was filed in? Does that state allow credit judgments to be renewed? If the statute of limitations on the judgment against you has expired, and the credit judgment has not been renewed, then you have grounds for a successful dispute.
Even if the judgment is still timely, you still may be able to dispute it successfully. When you dispute an item on your credit report, by law the credit bureau has 30 days to verify the accuracy of that item. Most courts these days have a tremendous backlog of such requests to deal with and often it will take far longer for the court than 30 days to respond. However, if the court does not respond within 30 days, then the credit bureau must delete the item – that’s the law.