What Is a Judgment and Will It Hurt Your Credit?

October 24, 2023 | 6 min read

Credit Saint

Written By:

Credit Saint

Ashley Davison

Reviewed By:

Ashley Davison

If you fall far enough behind on a bill, a creditor can sue you for the unpaid debt. If the judge rules in the creditor’s favor, the resulting civil judgment can give the creditor new options for collecting the money—even taking money from your paycheck or bank account.

Currently, civil judgments don’t appear on consumer credit reports from the major credit bureaus and don’t impact credit scores. But you still owe the debt, and they can still impact your ability to qualify for a loan.

What is a Judgment?

judgment is a resulting decision in a lawsuit. In a civil lawsuit (as opposed to a criminal case), if the court sides with the plaintiff (the party that brought the case), there will be a civil judgment against the defendant.

When one of your accounts goes past due, the plaintiff may be a creditor or debt collection company, and you could be the defendant. When a creditor or debt collection agency wins and gets a judgment against you, the court may give the company new ways to collect the debt. It could also decide that you have to pay additional fees to help cover the company’s costs.

If you don’t respond or show up at the court case, the plaintiff may win a default judgment against you. Meaning, they win without you having a chance to defend yourself.

Rather than allowing the other side to win by default, it’s often best to respond when you learn about the court case. Even if you think you don’t owe the debt, or that you owe less than they claim, you’ll have to present your case if you don’t want them to win a default judgment.

If you don’t know what to do and can’t afford an attorney, look for legal aid service in your area. These nonprofits offer free legal assistance to low-income households. You may also be able to find free guidance online.

How are Judgments Collected?

Once you have a judgment against you, the plaintiff may be able to collect the money in several ways:

  • Wage attachments or garnishments: The creditor can contact your employer and request that a portion of your paycheck gets sent directly to the creditor.
  • Bank account garnishment: The creditor may be able to contact your bank and have money withdraw from your bank account.
  • Property liens: The creditor may be able to add a lien on your property, such as a home. If you try to sell or refinance your home, money may be redirected to pay off the lien holder.
  • Seizing and selling assets: In some cases, the creditor may be able to ask a local sheriff to take your personal property and sell it to repay the debt.

Your case, federal law, and state laws can impact the creditor’s options. You’ll also be left with some money for basic living expenses, and certain types of income (such as disability benefits and Social Security) may be exempt from garnishment. But even those forms of income could be garnished if you owe federal student loans or child support.

Civil Judgments Don’t Impact Your Credit Scores Anymore

Legally, civil judgments can appear on credit reports for up to seven years. And credit scoring models view these as negative marks that can lead to lower credit scores.

However, changes to credit reporting requirements and company policies in 2017 resulted in the removal of all civil judgments from the consumer credit reports from Equifax, Experian, and TransUnion.

As a result, civil judgments currently don’t appear in your credit history or hurt your credit scores. The changes also lead to the removal of liens from their credit reports. If the policies change, you may see judgments and liens appear on your credit reports in the future. In the meantime, you can still find another type of public record, bankruptcies, on credit reports.

But Judgments Can Still Impact Your Creditworthiness

Even though you won’t find a civil judgment in your credit report from Equifax, Experian, or TransUnion, having a judgment against you can still impact your ability to qualify for a new credit account.

Notably, when the big three credit bureaus stopped including judgments in credit reports LexisNexis, a specialty credit bureau, started selling a liens and judgments report to creditors. The company was already supplying this information to some of the bureaus and had a system in place for collecting and updating public records. As a result, a creditor can still easily find and use this information when considering your application.

For example, if you apply for a mortgage, the lender can request your three consumer credit reports from the big three bureaus, credit scores based on those reports, and the liens and judgments report from LexisNexis. The lender can then make a decision based on all this information, plus everything you provided in your application.

However, creditors do need to pay for extra credit reports or scores. If you apply for a smaller loan or a credit card, the creditor might make a decision based on one credit report and score rather than gathering all as much information as possible.

How to Deal with a Judgment

Even if a judgment isn’t directly impacting your credit scores, you may want to address it right away to stop wage garnishments and clear liens. The amount you owe can also continue to climb due to interest if you don’t address the judgment.

  • Vacate the judgment: If the creditor won a default judgment, you might be able to get the judgment vacated (or set aside) by filing a motion with the court explaining why you didn’t respond. You could then have a chance to defend yourself and prove why the creditor doesn’t have the right to collect the money.
  • Appeal the verdict: If you appeared in court and lost the case, you may still be able to appeal the verdict.
  • Pay the amount: You may decide to pay the amount rather than fight the verdict. You can still ask the creditor for some form of assistance, such as a payment plan.
  • Settle for less than the full amount: Creditors may also be willing to accept a settlement offer for less than the full amount you owe.

Your choices can depend on the timing, as there’s often a limit to how long you have to file a motion or appeal a verdict. The creditor’s willingness to accept a settlement can also depend on the circumstances. They may prefer to take a smaller amount to avoid having to deal with collecting the money. Or, if they’re worried you might declare bankruptcy (which could discharge some judgments), they may be more willing to settle.

Continue Improving Your Creditworthiness

You might not have to worry about removing judgments from credit reports for the time being. But other negative marks, such as late payments and charge-offs, could be hurting your credit and holding you back.

As you work on improving your credit by making on-time payments and paying off debts, you could hire a credit repair company to review your credit report. Federal law gives you the right to dispute items on your credit report, and if something isn’t correct, timely, or verifiable, the credit bureaus must remove that item.

After discussing your specific situation and credit history, a credit repair specialist may be able to spot mistakes that you didn’t notice when reviewing your credit report.

Credit Saint has an A rating with the BBB, five-star reviews on comparison sites, and offers a money-back guarantee if you don’t see anything deleted from your credit report in the first days. There are also different packages available to consumers based on their budget and needs.

Ashley Davison

Reviewed By:

Ashley Davison


Ashley is currently the Chief Compliance Officer for Credit Saint, previously the Chief Operating Officer. Ashley got into the Financial world by working as a Logistics Coordinator at Ernst & Young. Coming from a previous career in education, she is eager to teach the world everything she knows and learn everything that she doesn’t! Ashley is a FICO® certified professional, a Board Certified Credit Consultant, a Certified Credit Score Consultant with the Credit Consultants Association of America, UDAAP certified, and holds a Fair Credit Reporting Act (FCRA) Compliance Certificate.