The Influence of a Civil Judgment on Your Credit Score

 Posted on August 23, 2023 in Civil Litigation

A civil judgment is a legal ruling against an individual or entity in a non-criminal court case. These judgments can arise from various issues, such as unpaid debts, breach of contract, or personal injury claims. While the immediate implications of a legal judgment can be difficult to deal with, the influence on your credit score is a major concern.

How is Your Credit Score Impacted?

A civil judgment can have a detrimental effect on your credit score. Credit agencies may interpret it as evidence of financial insecurity and irresponsibility, resulting in a reduction in your credit score. This decline can make it challenging to secure loans, credit cards, or even favorable interest rates in the future.

With a civil judgment on your credit report, obtaining new credit can become arduous. Lenders may see you as a higher risk and may be hesitant to extend credit to you or may require higher down payments and collateral. A civil judgment will likely appear on your credit report for a considerable period, typically seven years or longer. Potential lenders, landlords, or employers may review your credit report, affecting their perception of your financial reliability.

Additional complications to your credit include:

• Difficulty in obtaining loans

• Higher interest rates

• Limited access to financial opportunities

• Potential wage garnishment

What Can You Do to Mitigate a Civil Judgement’s Impact on Your Credit Score?

While a civil judgment might negatively influence your credit, there are things you can do to lessen its impact. If possible, try to settle the judgment with the creditor. Negotiating a payment plan or a lump sum settlement can demonstrate your commitment to resolving the debt and may positively impact your credit report.

Check your credit report regularly for accuracy. If you find any errors related to the civil judgment, dispute the information with the credit bureaus to have it corrected. Communicate with the creditor and explore options to pay off the debt. Some creditors may be willing to negotiate a settlement or offer more favorable payment terms.

Focus on building a positive credit history by making timely payments, keeping credit card balances low, and avoiding additional financial missteps. If you believe the judgment was obtained unfairly or inaccurately, seek legal advice to explore the possibility of having it vacated or overturned.

Contact a Wheaton, IL Civil Litigation Attorney

The best way to avoid the impact of a civil judgment on your credit score is to try to avoid a civil judgment with the help of an experienced DuPage County, IL, attorney. The attorneys at NN Legal Group can help you formulate a plan to mitigate the impact of a civil judgment. Call 630-474-0925 right now for a free consultation.

Sources:

https://www.ilga.gov/legislation/ilcs/documents/073500050K2-1402.htm

https://files.consumerfinance.gov/f/documents/cfpb_quarterly-consumer-credit-trends_public-records-credit-scores-performance_2019-12.pdf

https://www.creditkarma.com/advice/i/long-public-records-stay-credit-report