Judgments are very negative. It means you have been sued and that you were found liable to pay a debt. Judgments can remain in your credit report for 7 years, but they can also be renewed at the creditor's discretion and they can also be re-inserted. Once a judgment expires and the creditor renews it, the new record becomes public. The FCRA allows judgments to be listed for 7 years or longer if the governing statute says so.

It is best to pay a judgment if you owe it, but it's even better to settle the debt before the court date to avoid the item from ever being entered. If you are sued, show up and negotiate to prevent entry. There is a procedure called "vacating a judgment" that allows the record to be recorded as vacated, which means legally void.

Why It Matters: Some judgments can literally be left in your credit reports for up to 20 years. This happens when the original judgment remains for 12 years according to the state statute and is then renewed for another 12 years.

What You Need to Know: Here are some items to consider if you have a judgment:

• If you have a judgment, it's worth negotiating with the creditor to vacate or dismiss the judgment in exchange for payment. Additionally, if the judgment has been awarded in error or had an improper service, you can file a motion to vacate it. SAMPLE LETTER FOR JUDGMENTS.
  
• Be sure to read your state rule for judgments to find out how your state governs them. There may be exceptions in your state that works to your benefit. Remember, you have an absolute right to negotiate with the judgment creditor to offer payment in exchange for vacating the judgment.
  
• (WHAT IS?) It's a simple form that the judgment creditor fills out and files with the court. Depending on your area, your judgment creditor may also offer to accept a "deferred judgment" wherein he will accept payments and upon final payment, he will dismiss the suit.
  
• Not only is a judgment a credit killer, it also leaves you open to the judgment creditor seeking your assets. This is a terrible way to live and is very stressful. Everything you do regarding your financial assets will be at risk.
  
• The credit rating is the least of your problems if the judgment is for a lot of money. If you think you are about to be sued, you have absolutely nothing to lose by trying to negotiate before suit is filed.

Steps to Take:

1. Try to negotiate with your creditor-you may be able to arrange a new payment plan and avoid a lawsuit
   
2. Pay your judgments as quickly as possible
   
3. Educate yourself on the laws regarding judgments in your state. It is possible that you may find a benefit that can help you alleviate your debt
   
4. Remember: You can rebuild your credit after a judgment. You will not be forever deemed as having "bad credit."

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Select a link from the list below to begin learning more about your credit.

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It’s Never Too Late to Repair Your Credit
Inside Your Credit Report
What’s In Your FICO Score
What Is Good Credit
Establishing Good Credit
How to Improve Your FICO Score
Using Credit Cards Wisely
30 Reasons Your Credit Score Is Low
Repairing Your Own Credit
Judgment Strategies
Facts About Credit Inquiries
Your Rights Regarding Debt Collection
Divorce and Credit
Coming Back After Bankruptcy
Charge-Off Debt & the Seven Year Rule
Top Ten Do's and Don'ts During the Loan Process
Identity Theft and the FACT Act
CRC – What You Can Expect