Bad credit can be a bad situation. It can affect the types of credit cards you can get, for sure, but it can also affect your car insurance, ability to get a mortgage and even your ability to get the job you want. Yes, employers look at credit reports, in an effort to see how responsible a person is.
So you want to repair your credit. How do you go about doing that? There are credit repair companies out there, but you may want to save a bit of money. Maybe you can spend hours on the phone with credit bureaus, navigating through the massive piles of paperwork that come from challenging negative items on your reports. It doesn’t sound like fun.
And what if you have a civil judgement on your report? What is a civil judgement, you ask? Well, sometimes a creditor might take you to court to win damages if you have not paid your bill. If you have been ignoring a collections agency for a while and they want your money bad enough, they are going to sue you. And win.
The worst thing you can do with a debt is ignore it. Once you get to the civil court system and lose, it is very hard to wash that stink off your credit report. A judgment on your credit report is incredibly damaging. Not only can the judge put a lien on your assets, like your house or car, the court can begin to garnish your wages. And then you have the judgement following you around on your credit report.
Judgements stay for 7 years from the date filed. The item affects your credit less and less as those 7 years progress, but you will most likely have to wait for those full 7 years before being able to get a new mortgage, car loan or large loan. It is possible to have those judgements removed though. Check out http://aaacreditguide.com/judgments/ to read a personal story of how someone was able to get a judgement taken off their credit history.
Where do pernicious judgements come from? Many times, a failure to pay child support or alimony can result in a civil judgement against you. It is the court ordered mandate to pay a debt that will live for a long time. If you have a collections agency hounding you, that is less serious.
So the best practice to keep yourself in decent shape, credit-wise, is to avoid judgements at all costs. Although talented credit lawyers can get that judgement taken off your report, it can be a heck of a ride. One that you don’t want to get on.