| Judgments may have a worse effect on your credit | | | | debtor must be legally served and a court date is set |
| score than collections. Since judgments may be | | | | once this occurs. And if the debtor can't be located, |
| reported much longer than collections, depending on | | | | the creditor may file papers to circumvent the serving |
| which state you reside in, they may wreak havoc on | | | | process. In either case, the creditor will most likely be |
| your credit score for many years. Judgments appear | | | | awarded a default judgment if they do not show up to |
| in the "public records" section of your credit report, | | | | court. |
| which is different than the section that contains | | | | Many judgments can be settled for less than the full |
| collections. Also, in much the same way as a collection, | | | | amount by either negotiating with the creditor for a |
| once a judgment is reported on your credit report, it will | | | | release of judgment or seeking the help of an attorney |
| still show as "paid" even after you pay it off. Many | | | | that specializes in credit litigation. Many attorneys may |
| states also allow judgments to accrue interest, so don't | | | | offer to work with a creditor who has obtained a |
| assume that the amount shown on your credit report | | | | judgment for a small fee of a few hundred dollars or |
| is the actual total amount due. It's never a good idea to | | | | even less. Once a settlement is reached, make sure to |
| ignore judgments for this very reason. Some states | | | | get a release of judgment to prove that it's been paid |
| allow for double digit interest and additional fees to | | | | or settled and send this to the credit bureaus so your |
| accrue, so the balance of a judgment could easily | | | | credit rating can improve. |
| double or triple in a few years time. Don't let judgments | | | | Since credit scores are determined by an algorithm, it's |
| go a very long time without addressing them. | | | | impossible to know exactly what effect a judgment |
| Judgments are typically the result of creditors pursuing | | | | will have on the score. But one thing is for sure: a |
| legal action against consumers who failed to pay | | | | judgment does not help your credit rating. If you |
| various debts. Some credit card companies may | | | | suspect a creditor may have been awarded a |
| pursue legal action once an account goes to collection, | | | | judgment against you, obtain a free credit report today |
| but usually only if the amount is worth them hiring an | | | | and make arrangements to either pay or settle the |
| attorney and filing a lawsuit. Once a lawsuit is filed, the | | | | judgment as soon as possible. |