Does Clearing Judgment Clean Your Credit Record?

Today, we’re diving into the murky waters of judgments and credit reports. A judgment is a public record of when a creditor or collector took legal action against you so you’d pay out. This makes for a quite gruesome credit report. What if you’ve paid off a judgment? How does one go about removing this from a credit report, and what happens next? Keep reading for these questions answered and more!

What happens when you’ve paid off a judgment?

In most cases, they don’t disappear from your credit record. Judgments can stay on your credit report for as long as 7 years.  Once you pay the debt, the judgment might be marked as “settled” on your report. This is better than it just looming there as a giant red flag. Even better: over time, the impact of a judgment lessens, especially if you work towards maintaining good credit habits. Recent judgments look worse than older ones. Unsolved judgments are worse than settled ones. If the judgment is marked as “settled,” it shows you addressed the issue and are actively managing your finances. This can improve your chances of loan approval, especially if you’re actively improving your credit score.

Can I clear off a judgment from my credit report?

It is possible to remove judgments entirely from your credit report, but it may involve legal aid, and possibly, a court appearance. Here’s when you should take this route:

  • If there are errors or inaccuracies in your report: If the judgment contains errors, like the wrong amount or wrong creditor listed, you can dispute said errors. You could potentially get the judgment removed entirely.
  • Rescission: Sometimes, you can convince to rescind the judgment by f the judgment was granted in error, if you weren’t properly served with the lawsuit, or if there were other irregularities in the legal process. However, this usually requires legal expertise.
  • Statute of Limitations: Every jurisdiction has its limitations on how long judgments can be enforced. Once that time has elapsed, which can be several years, the judgment might no longer be legally enforceable. Some bureaus might choose to remove the judgment due to a period of inactivity.

So, if there are errors within the judgment, it may be possible to get it expunged.

How to Maintain Good Credit

If you’d like to have a good credit record despite having a judgment in your history, implement the credit hacks below. Good credit helps get better and lower interest rates, better loan terms, better insurance premiums, and can even improve your rental prospects (yes, landlords check credit!) It’s the smart thing to do if you want to save money– you might even get better benefits from your credit cards! Here are some tips from our credit clearance and improvement professionals. Let’s start by how to build credit.

Building credit from scratch

So, you’ve paid all your debts and have a brand new slate. Unfortunately, having a neutral score (around 580-669) doesn’t automatically qualify you for loans. And if it does, you’re not likely to gain favourable terms, as a score like that indicates you’re high risk. Here’s a guide to building credit from scratch.

Apply for credit with caution.

We recommend applying for a secured credit card (a card that uses collateral) to ensure you make payments. You’ll have to make a deposit, which becomes your credit limit. The deposit protects the issuer from losing money if you don’t pay your bill, so secured credit cards are easier to get for people with bad credit or no credit history. Use the card to make small purchases– 30% of your limit. Using only a little credit shows compared to how much you have available (called credit utilisation ratio) to illustrate you’re financially responsible.

Build credit without a card.

You can do this by paying rent, cellphone contracts, streaming service bills, and utility bills on time.

Always pay on time.

This is very important. Late payments can significantly damage your credit score. Set up autopay or reminders to ensure timely payments.

Diversify your credit mix.

This is for when your credit score has improved after some time. Try out opening store accounts, taking out small loans (and paying them back quickly), and credit cards. Remember to only use a small amount of credit on each one.

Check your credit score regularly

Remember to monitor your credit score regularly– we recommend checking it quarterly, or every few months. You can a free credit report once per year from every credit bureau, making regular checks easy. Credit Boost has a free credit checker that provides you with your score in minutes.

Clear off a judgment from my credit report.

If you need assistance with judgment removal, get in touch with Cape Town Legal Consultants. We’re experts in the field and can get judgments removed easily and quickly.