A debt that is the result of losing a court case is called a judgment. Judgments appear on your credit report and can adversely affect your credit rating. A "satisfaction of judgment" is a legal document that serves as a court record indicating that you have paid your debt. Credit reporting agencies regularly update credit reports based on court records, and they might update the status of your judgment, but you might need to be proactive to ensure this.
Appear vs. Clear
Judgments are public records, and as such they don’t “clear.” Section 605 of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, mandates that accounts in collection will appear on your credit report for seven years. Even a satisfied judgment will still show on your credit report for this seven years. It’s important to note that judgments on your credit report also show their status and outstanding balance. However, credit reporting agencies will mark a paid and properly documented judgment as “satisfied.”
The Creditor’s Obligation
The party to whom you owe the judgment debt is called the judgment creditor. After your final payment, he must file a satisfaction of judgment form with the court. The filed satisfaction of judgment is legal proof that you have satisfied the judgment, and it can be used to notify credit reporting agencies. Keep in mind that there is no definitive timetable or process for a positive update such as this to be reported to them.
Check your credit report to see the status of your judgment record. There are three major credit reporting agencies: Experian, TransUnion and Equifax. An amendment to the Fair Credit Reporting Act requires them to furnish you with a free copy of your credit report yearly if you request it. Your credit report will include instructions for disputing items that you believe are incorrect.
By law, these agencies must investigate and verify any requested entries within 30 days. Send a written request to all three agencies. The agencies will either amend the satisfied judgment to properly reflect its status, or they will indicate that they are still investigating it. If they do not reply within 30 days of your notice, they must remove the entry entirely.
Use the Law
You may ask your judgment creditor to file a satisfaction of judgment form. The length of time gives to the creditor to file the form varies from state to state, but it is usually between 14 and 30 days after your request. In many jurisdictions, if the creditor fails to file it within the allotted time, she can be held liable for fines and damages you incur.
- Experian.com: Credit Advice / Satisfaction of judgment will not cause the public record to be deleted
- Bills.com: Information on Judgment Appearing On Credit Report
- Federal Trade Commission: How to Dispute Credit Report Errors
- Nolo.com: Everybody's Guide to Small Claims Court
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- The Florida Bar. "The Life of a Money Judgment in Florida Is Limited for Only Some Purposes." Accessed March 16, 2020.
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- County of Napa. "Real Property Levy - Writ of Execution." Accessed March 16, 2020.
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Steve Lacher has been a skilled technical consultant since 1994. He has written training materials and articles for technical journals such as "Domino Power Magazine," taught on television, been a developer and performed many other tasks related to the use of technology in business. Lacher holds a Bachelor of Arts in writing seminars from the Johns Hopkins University.