Avoiding Judgments On Credit Report

Credit scores are very important especially if you are planning to buy a home by taking out a mortgage. If you have a high credit score, you will be entitled to higher credit line as well as lower interest rates. On the other hand, a low credit score will provide you with the opposite, limited credit line and high interest rates. This is primarily the reason why you should avoid negative entries in your credit report. Entries like collection accounts, charge-offs and judgments could cost you those very important points.

Judgments are entries that show you are being sued by your creditor for failure to settle a debt. You should avoid them at all costs. A judgment against you will stay on your report for seven years even if you have paid up the debt. It will only show up as “paid judgment” or “satisfied judgment”. In order to avoid these entries, you should do the following.

Check Credit Report Regularly
Your credit report should be used to check for any debts that have yet to be collected. It is recommended that you get a copy of your credit report once every month so you can keep track of negative entries. If there are any wrong entries, you should report them immediately and dispute the claims. You should make sure that all your financial documents are in order especially receipts in order to back up your claims of wrong entries. On the other hand, judgment entries that suddenly appear on your credit report should be reported also. The judgment process requires notification. If you were not served any summons, then you can file for a “motion to vacate”.

Negotiate With Judgment Creditor
You should remember that preventing a judgment entry is easier than removing one on your credit report. This is why you should negotiate with the judgment creditor before the court date. In fact, as soon as you got served, you must contact the creditor at once to work out a payment arrangement. In any case, show up at the date of the hearing to show the judge that you are sincere in your efforts to pay off your debts.

Check for SOL
The statute of limitation for debts is usually within 4 to 6 years. This means that if your debt expired and you were still served, you can use this to dismiss the case against you. On the other hand, the statute of limitation for judgments is from 12 to 20 years. If you do not want your creditor to demand payment for as long as this or worse, they could claim liens on your assets, you should at all cost settle the matter at once.

Not surprising, judgment creditors are usually very open to negotiation. If the entry has been made, then be sure to demand its removal from your credit report in exchange for the debt payment. You should put everything in writing so that you will have proof of the agreement in case the entry still shows up after a few months.

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Frank Bruno
http://www.DisputeDemon.com