Expert: Regan Shinski - 4/27/2010

Question
Hi:

I had two judgements that was affecting my ability to get a home for a mortgage.  I was able to negotiate a settlement with both companies, sent them the money and they sent me confirmation that the debt has been satisfied.  However, how long does it take for the information to show on my credit report?  Since the information on my credit report is no longer valid (because debt is settled) can I report the information as incorrect?  If so, will that have the potential to cause more problems than waiting for the credit bureaus to receive the update from my creditors?  I am just wondering which is quicker.

Answer
Hello Jack:

There are three options.  They go in order.  The best option (credit wise) takes the longest and the fastest option to get it updated is the least desirable option for your credit score.

The best option for your credit is to get the judgement vacated.  Ideally, your settlement with the creditors would have included a clause for them to initiate a court action to vacate - dismiss - the judgement.  This essentially means a court proceeding would have been initiated to give a retrial in which the judgement would have been stricken from the court documents.  If that clause was not in your settlement, you can initiate action through the court to have the judgement vacated.  Again, this is a legal procedure, so it can take time.  A court date would be set up, a hearing takes place, and then - if you win - it still may take several weeks or more to get the original judgement off your credit reports.  The benefit is that obviously it would be as if this incident never happened on your credit history.  You would need to contact the specific court for the procedure to file a motion to vacate the judgement.  These procedures vary by court and some are limited by time and reason but may be worth your time.  It would also be wise to make sure you do not violate your settlement by initiating this court proceeding.

A second option is what you kind of alluded to.  You can send dispute letters directly to the credit bureaus.  A simple letter stating their reporting is not accurate.  The credit bureaus have to "research" this and would reply back to you in writing in about 30 days.  The goal is that hopefully it will not be verified or found and therefore has to be deleted.

The third option is to send the credit bureaus a copy of your settlement and proof of payment directly to the credit bureaus.  They will again research or investigate this.  The likely outcome is that the judgement will remain in place but be marked as satisfied or paid.  It will stay on your reports for up to seven years from the original date of entry.  This is likely the fastest route to show that you have paid the judgment, but the negative is that is will (properly) show only as paid - NOT deleted.  The other big negative is that once you send the information to have it updated, it becomes VERY difficult to go back and try options one or two as described above.  You very well could be stuck with that paid judgement showing for some time.

So the decision comes down to how much time can you afford to wait.  Through determination and good credit repair, the judgement has a good chance to come off in time but there is no guarantee it will.  Also, if you do nothing there is a good chance this will NEVER be updated.  Court recorded judgements typically need new hard evidence presented to them for they change to take place on the credit reports.  You will likely need to initiate one of the three options above to get it changed from its current status.

Good luck.  I hope this helps.

Regan