When creditors, potential employers and bill collectors see judgments on people’s credit reports, here are some of the thoughts they may have. If this joker had to be taken to court to pay his bills, if I hire him, will he follow up on instructions given to him? This guy didn’t show up in court, I guess he does not care about his finances.

A judgment means that a person has done the following things. He/she has been three to six months behind on their debt. They have been sued for non-payment. If they showed up in court, they could get a consent judgment with a payment arrangement. If they did not show up, a judge would issue a default judgment.

Here is why judgments look so bad. They can be the first things that show up on a person’s credit report. Even if the judgments have been paid, they look bad. I can remember seeing credit reports for potential employees and debtors in which people had three to six judgments on them. My first thoughts were that these people were nothing but dead beats. If I saw that they were paid, I had some empathy for them. If they had not been paid off, I had my doubts about them being a good collector.  

Judgments can also be listed under another section of a person’s credit report. They can be listed as a collection account as well as an adverse account. A potential creditor or debt collector can look at one account as being two or three accounts. Because judgments can be so detrimental to a person’s credit report, I tell clients the best way to avoid one is to avoid a lawsuit. In part 2, we will talk about how to avoid a judgment.