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A Penny For Your Thoughts

What is a judgment?

A judgment is a decision made by a court that has been entered into the public record (they are visible on court records available to the public and potentially on your credit report). Judgments are the result of a legal action or lawsuit.


How it works

  • Someone files a lawsuit.
  • The other party has a chance to respond to it (“Answer”).
  • If they lose the lawsuit, a judgment is entered.

The judgment is the court order for the loser of a lawsuit to pay the winner, which can be a monetary (financial payment) or a nonmonetary payment (e.g., service, product)

Some examples of a judgment include a court ordering the loser to pay $10,000 or forcing a contractor to complete a job rather than pay a sum of money.

Calculator: How much will you have at retirement?

Effect on credit scores

Having a judgment on a credit file will often cause a drop in the credit score. A judgment remains on a credit report for seven years, but it will have a worse effect on a credit score if it’s unpaid.

Why important

Maintaining a high credit score is critical for anyone trying to secure a loan. It is critical to avoid judgments and other court orders that will blemish your records and financial well-being.

Fun facts:

  • If you are only interested in dating someone with a high credit score, an online dating service called is available. The site’s motto is “Credit Scores Are Sexy.”
  • Insurance companies can determine whether or not someone will file a claim by looking at their credit reports. A high score = less likely to have an accident or loss vs. a low score = more likely to file a claim.
  • If you have never had a credit card, you will not have a credit score.



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