Having a judgment on your credit report affects your FICO score in a very negative way. However, there are some things you can do in order to qualify for a loan. You still have options! We’re going to cover a few questions you likely have about judgments:
• What exactly is a judgment?
• What can I do to get rid of a judgment?
• What happens to my credit history or FICO score?
A judgment is a court decision stating that the person suing you is in the legal right to do so. It states the actions you need to take to remedy the “wrong.” It will show up in the public records section of your credit report. If this is from a landlord, it will likely be called a “writ of restitution.”
There are a couple actions you can take when someone files a judgment against you:
- File a motion to vacate – Filing a motion to vacate is basically voiding the paperwork. It is the equivalent of filing an appeal to the court. There are many times when court procedures are not carried out correctly and can be dismissed on technicalities. The two common technicalities are a) the defendant (you) did not respond to the court summons paperwork in the allotted amount of time or b) the defendant failed to show up to the scheduled court date (winning by default). If the court decides you had good reason to not respond or to show up to court, they may still decide to schedule a hearing to vacate.
- Prepare your motion to vacate – First, you need to look up your state’s rules to determine the civil procedures. Pay attention to the procedures because not following them could lead to your motion being thrown out on a technicality, too. There are two documents you must prepare: a Motion and Declaration to Vacate Judgment and an Order to Show Cause. On these documents you will want to include:
- The case name, court reference number, and names of all persons involved in the judgment
- An explanation of your reasons for filing the motion
- A statement of your procedural defenses that offer good reasons as to why you did not respond or show up to the court date (procedural defenses can be found in state civil procedures)
- File the paperwork – You will likely have to file the motion to vacate at the same court that issued the judgment. Bring your typed documents to the court clerk and tell them you are filing a motion to vacate a judgment. From this point, the court clerk will be able to give you any additional paperwork to fill out and answer any further questions.
- Notify the plaintiff – sometimes the court will notify the plaintiff (or their attorney) of the motion. Ask the court of the plaintiff will be served or if you need to serve them. If you need to serve them, you can hire a third-party service for a fee.
- If the plaintiff decides to settle out of court after having been served, demand that they file paperwork themselves to dismiss the lawsuit and notify collection companies and credit bureaus of the mistake. Also, get copies of any paperwork they received from the courts about the judgment vacation/dismissal before accepting the settlement offer.
- If it goes to court, you can either win by default if they fail to show up, or they show up and the case is decided by the judge.
If you win, you should receive a court document stating the dismissal. Send copies of this document to any of the collection agencies and credit bureaus to have them remove the judgment from your credit report. Even though you demanded the defendant do this, it’s better to be safe and send it in yourself. Once the judgment is removed, your FICO score should reflect a positive change (provided nothing else changed).
Having a judgment on your credit report can negatively affect your FICO score and your borrowing ability. However, there are ways to fix this. With a bit of work, you can position yourself to make those major financial decisions like financing a mortgage on a new home.
Get a Mortgage After a Judgement
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