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Can I vacate a judgment during settlement negotiations to prevent credit reporting?

Can I vacate a judgment during settlement negotiations to prevent credit reporting?

Full question:

A rather large judgment entered in California from 1989 (renewed in 1999) has been recorded in my home state of NJ last week. Never knew about it, total surprise. This has never showed on any credit report and my credit scores with all three reporting agencies are outstanding. My concern is that it may NOW show on my credit report (20 years later) because of the event of the recording in my home state and satisfaction process in the near future. Is there a method (perhaps an agreement to actually VACATE the judgment as part of the settlement) during the settlement negotiations with the judgment creditor to eliminate the possibility of this showing up at all on my credit report?

Category: Debts and Credit
Subcategory: Credit Repair
Date: 04/07/2025
State: New Jersey

Answer:

When a judgment is filed against a person, it can be disputed or satisfied. You may file a Motion to Satisfy Judgment, which indicates that the judgment has been satisfied. This will show up as 'satisfied' on your credit report but will remain for seven years, as required by law.

If you believe the judgment is incorrect, you can dispute it under the Fair Credit Reporting Act. The information provider must investigate your claim and report the results to the credit reporting agencies (CRAs). If the information is found to be incorrect, they must notify all nationwide CRAs to correct your file. If the dispute does not resolve in your favor, you can request that your statement regarding the dispute be included in your file. A notice of your dispute must accompany any report of the negative item by the CRA.

To update your credit report and reflect the debt as paid, you should obtain three certified copies of the Acknowledgment of Satisfaction of Judgment from the clerk's office and mail one to each of the three major credit-reporting agencies: Equifax, Experian, and TransUnion.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Can judgments be removed from my credit report?

Judgments cannot be completely removed from your credit report unless they are found to be inaccurate or if they were vacated by a court. If a judgment is satisfied, it will still appear on your report but will be marked as 'satisfied.' This status indicates that the debt has been paid, but the judgment can remain for up to seven years from the date it was entered. Always check your credit report for accuracy and dispute any errors with the credit reporting agencies.

How do I clear my judgment?

To clear a judgment, you can file a Motion to Satisfy Judgment if you have paid the debt. This will indicate that the judgment has been satisfied. If you believe the judgment is incorrect, you can dispute it under the Fair Credit Reporting Act. If the dispute is successful, the judgment may be removed from your credit report. Always ensure you have documentation to support your claims.

How much will my credit score go up when a judgment is removed?

The impact on your credit score when a judgment is removed can vary. Generally, removing a judgment can improve your score, especially if it was negatively affecting it. However, the exact increase depends on various factors, including your overall credit history and current credit utilization. Regularly monitoring your credit can help you understand how changes affect your score.

How long does a judgment stay on your credit report in California?

In California, a judgment typically remains on your credit report for seven years from the date it was entered. Even if the judgment is satisfied, it will still show up as 'satisfied' for the same duration. This is in accordance with the Fair Credit Reporting Act, which governs how long negative information can stay on credit reports.

How do you get a judgment removed from your credit report?

To remove a judgment from your credit report, you can dispute it if you believe it is inaccurate. File a dispute with the credit reporting agencies, and they must investigate. If the judgment is found to be incorrect, it will be removed. Alternatively, if you pay the judgment, you can file a Motion to Satisfy Judgment, which will mark it as satisfied but will not remove it from your report.

How bad is a judgment on your credit report?

A judgment on your credit report can significantly lower your credit score and impact your ability to obtain loans or credit. It indicates to lenders that you have not fulfilled a financial obligation, which can raise concerns about your creditworthiness. The presence of a judgment can make it more challenging to secure favorable interest rates or terms on future credit.