How does a judgment affect my credit score?

@vincenzo.murazik 

A judgment can have a significant impact on your credit score. When a judgment is entered against you, it means that a court has ruled in favor of a creditor or other entity that has sued you for an unpaid debt or any other legal matter. This judgment is then typically reported to credit bureaus and becomes part of your credit history.

Here's how a judgment can affect your credit score:

1. Negative impact on your credit score: Judgments generally have a negative impact on your credit score. Credit scoring models, such as FICO scores, consider the presence of public records, including judgments, as a negative factor in determining your creditworthiness. This can lower your credit score, making it more difficult for you to obtain credit or loans in the future.
2. Stay on your credit report: Judgments can remain on your credit report for up to seven years from the date they were filed. Even if you pay off the judgment, it may still be visible on your credit report for the full reporting period. However, some credit scoring models may give less weight to paid judgments compared to unpaid ones.
3. Potential for collection efforts: Following the judgment, the creditor may take further actions to enforce the judgment, such as wage garnishment, bank levies, or property liens. These collection efforts can further impact your credit and financial situation.
4. Difficulty in getting new credit: Having a judgment on your credit report can make it challenging to obtain new credit or loans. Lenders may view a judgment as an indication of financial instability or an increased risk of defaulting on future debts.
5. Higher interest rates: If you manage to get approved for credit despite the judgment, lenders may charge higher interest rates due to the increased level of risk associated with your credit history.

It's important to note that credit scoring models consider various factors when calculating your credit score, so the exact impact of a judgment may vary depending on your overall credit history. However, judgments typically have a detrimental effect and can significantly lower your credit score.