Many people know that unfortunate financial circumstances can result in negative credit report listings and that these listings can remain on your credit report for many years. The aftermath of vehicle repossession, late payments, defaulted accounts, and civil judgments can continue to harm your credit report and lower your credit score for up to seven years. You’re probably familiar with the more basic slip ups that hurt you, like late payments, but what exactly is a civil judgment?
A civil judgment means that there was a ruling against you in non-criminal court that requires the payment of damages. If you aren’t aware of the lawsuit and fail to appear in court, it will be reported as a default judgment. Judgments usually aren’t reported directly to the credit bureaus, but they’re listed in publicly available court records that the bureaus can review and include.
If there’s a judgment against you, you shouldn’t ignore it. Even if it’s a mistake and the debt doesn’t belong to you, you will need to take action to get it resolved to avoid negative consequences for your credit.
NerdWallet provides steps to take if you find a judgment on your credit report.