Civil Judgments No Longer Appear on Credit Reports – Here’s Why

Twenty-five years ago, getting slapped with a civil judgment also meant damaging changes to one’s credit report. Having a judgment on your credit report could have meant not being able to get a mortgage or a car loan. These days, things are different. Civil judgments no longer appear on credit reports.

Removing civil judgments from credit reports was part of a larger policy decision made by Equifax, Experian, and TransUnion as a result of a settlement between the three credit reporting agencies and more than 30 state attorneys general. That settlement was reached in 2015.

More Accurate Credit Reporting

The 2015 settlement stemmed from accusations that the three credit reporting companies were not maintaining accurate records. Specifically, the case pointed to certain types of public records – including civil judgments. Without accurate information from those records, credit reporting companies could not verify the accuracy of their own reports.

Satisfying the complaints made against them resulted in the three companies developing what is known as the National Consumer Assistance Plan (NCAP). The plan was officially launched in 2015 with gradual implementation beginning in 2017.

The plan called on credit reporting companies to take certain steps to ensure accuracy. By summer 2017, the vast majority of public records had been removed from consumer credit histories because accuracy could not be verified.

Name, Address, and Social Security Number

The NCAP required including name, address, and either Social Security number or birthdate, with all public records involved in a consumer’s credit report. Here’s the problem: privacy laws prevent publishing that information within civil records. That meant consumer reporting agencies would have to get it elsewhere.

In addition, the NCAP requires credit reporting agencies to update their data every 90 days. Because judgment debtors can move multiple times during the course of collection, it’s nearly impossible for the agencies to verify accurate addresses.

In the end, it was just easier for the three companies to exclude public records from their reports. So beginning in 2018, that is exactly what they did. Credit reporting agencies no longer look at public records. Likewise, things like civil judgments are not reported to them.

Still a Matter of Public Record

It is important to note that civil litigation is still a matter of public record even if credit reporting agencies don’t look at the data. Anyone can go down to the county courthouse and look up civil court records. They can find out how the court ruled on any case of interest.

Collection agencies, like Judgment Collectors based in Utah, make ample use of public records. They look into the records not only to learn the details of a particular case, but also to search for other information that might help them succeed in collecting from debtors.

Nothing stops banks, credit card companies, and other creditors from doing the exact same thing. Public records are just that: public. What does this mean? Theoretically, a judgment should not affect a consumer’s ability to obtain new credit because it doesn’t show up on their credit report. But a judgment could still impact their ability to borrow if a creditor goes looking through public records for judgments.

Best Just to Pay

Consumers might be tempted to look at NACP policies as giving them an advantage against judgment creditors looking for payment. But nothing good ever comes from letting debts go. The best course of action remains the same as it always has been – just pay what you owe. Make good on your debts and you will avoid civil litigation. And if you do get sued and lose, find a way to pay.