What is a judgment? How it affects credit and how to remove one

Whether you're facing a potential lawsuit or already dealing with a judgment after a lawsuit, knowing your options helps you minimize damage and move forward.

What is a judgment?

A judgment is a formal court decision that legally requires you or your business to pay money to someone else. When a creditor, vendor, landlord, or other party sues you for an unpaid debt or damages and wins, the court issues a judgment specifying the amount owed and creating a legally enforceable obligation to pay.

Judgments typically arise through one of two processes. In contested cases, both parties present evidence and arguments to a judge or jury, who then rules on the dispute. The court evaluates the facts, applies relevant laws, and decides whether the defendant owes money and how much. The judgment becomes the official record of that decision.

In many cases, however, the defendant fails to respond to the lawsuit within the required timeframe. If you receive a summons and don't file an answer with the court, for example, the plaintiff can request a default judgment. 

Courts typically grant these requests automatically. Default judgments are particularly dangerous because you may wind up owing more than you expected, including additional court costs and attorney fees.

Once entered, judgments often become powerful tools for creditors to collect what they're owed. 

Depending on state law and the type of debt, judgment holders may be able to garnish wages, seize funds from personal and/or business bank accounts, place liens on real property or personal property, seize and sell assets to satisfy the debt, or intercept tax refunds. These collection powers make judgments far more serious than simple unpaid debts.

Judgments appear in public court records maintained by county courthouses or state court systems. (You’ll often hear these referred to as the public record.) 

Anyone can search public records to find judgments against individuals or businesses. That also means that the information may be available even if it doesn’t appear directly on credit reports. 

There are several types of judgments including: 

• Money judgments: Require payment of specific dollar amounts.
• Default judgments: Entered when defendants don't respond.
• Summary judgments: Decided before trial when facts aren't in dispute.
• Consent judgments: Both parties agree to the terms without trial. 

Each type of judgment creates a legally binding order to pay.

The judgment specifies the judgment creditor (the party who won and is owed money) and the judgment debtor (the party who lost and owes money). It includes the judgment amount, the date entered, the case number, and the court that issued it. This information becomes part of the permanent public record and can be searched by anyone.

How do judgments impact personal and business credit?

The impact of judgments is different for business and personal credit. 

Consumer credit and judgments

As of 2018, the three major consumer credit bureaus (Equifax, Experian, and TransUnion) stopped reporting civil judgments and tax liens on consumer credit reports. 

This means personal judgments won't directly lower your personal FICO^® scores or VantageScore^® credit scores. The credit scoring algorithms don't consider consumer judgments because they're not included in the credit bureau data used to create credit scores. From a credit scoring perspective, personal judgments have no direct impact on personal credit scores.

That doesn’t mean you can ignore them, though. 

Since judgments remain in public court records indefinitely in most states, lenders conducting manual underwriting or detailed background checks may find the judgments and consider them in credit decisions. Mortgage lenders, in particular, search public records extensively and may require judgments to be satisfied before closing.

And even though a judgment isn’t on your credit report, that doesn’t mean it has disappeared. Creditors may be able to garnish wages or even seize money from bank accounts. If this happens, you may find it hard to pay other bills, which in turn can lead to late payments that hurt your credit scores. 

Business credit and judgments

Judgments can have a direct impact on business credit. Business credit bureaus such as Dun & Bradstreet (D&B), Experian (Business), and Equifax (Business) may include judgments in business credit reports. These judgments typically appear in the public records section of the credit report and may affect business credit scores.

When business credit reports include this information, the impact can be significant as judgments are considered one of the most serious types of negative information in a credit file. 

A single judgment can drop your business credit score by as much as 50 points or more depending on the score range and other factors in your credit file. Multiple judgments can compound the damage, potentially making it impossible to qualify for business financing.

The impact on business credit scores may last as long as the judgment remains on the credit report:

• Dun & Bradstreet: Removed after 10 years of inactivity.
• Equifax: seven years from filing date.
• Experian: six years, nine months.

If you pay a judgment, it may still continue to be reported though the status should be updated to show it’s been satisfied. 

The damage can go beyond getting a small business loan. Suppliers checking business credit before extending trade terms may see judgments and require cash on delivery instead. Landlords reviewing business credit for commercial lease applications may turn down applications or require larger security deposits. Insurance companies may charge higher premiums when judgments appear in business credit reports.

Even alternative lenders who work with higher-risk borrowers may decline applications when recent judgments signal ongoing financial problems.

Timing may matter, too. Recent judgments may be more damaging than old ones. A judgment entered within the past year can raise immediate questions about current financial stability, for example, while a five-year-old satisfied judgment, while still negative, may suggest the business has recovered and may be in better shape now.

Judgments vs. liens vs. collections

Judgments, liens, and collections can all affect your credit but work somewhat differently. Here’s an overview: 

Here's how debt problems typically escalate: If you stop paying a bill, after a period of time (sometimes a few months, or sometimes six months or more later, depending on the type of debt), the creditor will likely send the debt to collections. Credit bureaus may include the collection account on your credit reports, and your credit scores may suffer. 

If you still don't pay and the amount is worth pursuing, the creditor or collection agency may sue you or your business. (Again, this may depend on the type of debt, and whether you signed a personal guarantee). If they win and the court enters a judgment, the creditor can then take steps to collect that judgment.

They may be able to place a lien on property — a house, car, equipment, or bank accounts, for example. 

The progression: debt → collection → lawsuit → judgment → lien. Each step gives creditors more power to collect.

Collection accounts may hurt your credit immediately. Judgments let creditors garnish your wages and seize bank accounts. Liens give creditors claims on specific property. 

Collection accounts may hurt your credit immediately. Judgments let creditors garnish your wages and seize bank accounts. Liens give creditors claims on specific property. 

Removing these types of items from your credit reports can be tricky, especially those that are a matter of public record. You may sometimes be able to negotiate pay-for-delete deals with collection agencies. Courts typically remove judgments only if you prove improper service or other legal errors. Liens may disappear from credit reports after a time, usually several years.

Collection accounts can damage both personal and business credit scores as soon as they appear on credit reports. However, Equifax does not include collection accounts reported by third party collection agencies on business credit reports. (A creditor may report an account as in collections though.) 

While judgments and collection accounts are generally negative, not all liens have a negative impact. Two good examples are mortgages or auto loans. The lender holds a lien on the house or car as collateral for the loan. (In this example, the credit report will list the debt as a secured debt, but it won’t typically list a separate lien.)

Business credit works differently. Some business financing options require collateral, ranging from equipment to inventory to accounts receivable. When you pledge collateral for financing, the lender will usually file a UCC lien. None of these types of liens is automatically negative, but some business owners may find it harder to get financing if their credit reports list multiple UCC liens. 

How to check if a judgment is on your credit or public record

It’s not always easy to find out whether a judgment has been entered against you or your business. You may need to check multiple sources. Here are some tips:

1. Check your business credit reports. If you're concerned about business judgments, start with your business credit reports from Dun & Bradstreet, Experian Business, and Equifax Business. Judgments often appear in the public records section of these reports. You can access detailed business credit reports directly from each credit bureau or through Nav Prime. 
2. Search county court records where you live or operate. Most civil judgments are entered in county courts or state trial courts. Visit your county courthouse website or use online case search systems to look for judgments. Search by your name or business name. Some counties offer free online search portals, while others require in-person visits or phone inquiries. You may need to search in every county where you've lived or operated your business in recent years.
3. Check state court databases. Some states maintain centralized databases of court records across all counties. These vary by state — some are comprehensive and free, others are limited, or charge fees. Search your state court website for civil case search tools. Look for judgments, not just active cases, as judgment records may be in separate databases.
4. Use public records search services. Third-party services like LexisNexis Public Records, TruthFinder, or specialized judgment search companies aggregate court records from multiple jurisdictions. These services charge fees but provide broader searches across many counties and states simultaneously. This is particularly useful if you've moved frequently or operated businesses in multiple locations.
5. Request your consumer credit reports. While judgments no longer appear on consumer credit reports, it's worth checking to confirm. Visit AnnualCreditReport.com to get free credit reports from all three consumer credit bureaus. Review the public records section to verify that no judgment information is listed. If you find any judgment information on your personal credit reports, you can file a dispute. 
6. Conduct name searches in multiple variations. Judgments may be indexed under different versions of your name — full legal name, nickname, maiden name, or name variations. Business judgments might appear under DBAs, trade names, or variations in the company name. Search all possible name variations to ensure you find everything on record.
7. Check for judgments in multiple jurisdictions if you've moved. Judgments stay in the court records where they were entered even after you relocate. If you've lived or operated in multiple states or counties, search each one. A judgment from five years ago in a state you’ve left could still affect credit decisions if lenders search public records.
8. Search bankruptcy court records if applicable. If your business filed for bankruptcy, check bankruptcy court records through PACER (Public Access to Court Electronic Records) to see how judgments were treated in the bankruptcy case. Discharged judgments may still appear in court records but they should indicate that they were included in bankruptcy.
9. Set up monitoring for new judgments. Some courts offer email notifications when new cases are filed against your name or business. Third-party monitoring services can alert you if new judgments are entered. This proactive approach helps you identify judgments early — before discovering them during a financing application.
10. Verify satisfaction status if you've paid judgments. If you know judgments were entered but you've paid them, confirm that they are recorded as satisfied with the court. Unsatisfied judgments can be more damaging than satisfied ones, so it’s important to ensure the court record is properly updated.

Monitoring your business and personal credit can be a smart habit. This can help you spot issues or errors so you can address them. 

How to remove a judgment from your record

Removing a judgment from public records or credit reports involves specific steps and may require legal action. Consult an attorney for help navigating requirements based on your state and local laws. 

Here are some steps you can discuss with an attorney: 

• Pay the judgment in full and obtain satisfaction documents. The most straightforward path is satisfying the judgment by paying the full amount owed. Once paid, the judgment creditor must provide a satisfaction of judgment or acknowledgment of payment. File this document with the court that entered the judgment. The court will update its records to show the judgment as satisfied. While this won’t remove it from your business credit reports, the status changes from outstanding to satisfied, which is often significantly less damaging for credit purposes.
• Negotiate a settlement for less than the full amount. Sometimes judgment creditors will accept less than the full judgment amount if you can pay immediately. Contact the judgment creditor and propose a settlement in exchange for immediate payment and satisfaction filing. Once paid and filed, the judgment shows as satisfied even though you paid less than the full amount. 

Important: Talk to an attorney before you negotiate and ask them to review your settlement offer. Acknowledging the debt or making a payment may extend the statute of limitations in some states.  

• File a motion to vacate or set aside the judgment. If you have legal grounds to challenge the judgment, you can ask the court to vacate it entirely. Valid grounds may include: 
• • Improper service of the lawsuit (you never received proper notification).
  • Lack of jurisdiction (wrong court or state). 
  • Fraud by the plaintiff.
  • Excusable neglect if you missed the deadline due to circumstances beyond your control.
  • Mistaken identity if the judgment was entered against the wrong person or business. 

File your motion with the court that entered the judgment, providing evidence supporting your grounds. If the court grants your motion, the judgment is removed from court records as if it never existed.

• Dispute the judgment with credit bureaus if inaccurate. If a judgment appears on your business credit report but is incorrect — wrong amount, wrong party, already satisfied but showing as unpaid — dispute it with the credit bureau. Provide documentation showing the error, such as satisfaction documents, proof the judgment was vacated, or evidence you were never the subject of the lawsuit. Business credit bureaus should investigate within 30 days and correct or remove inaccurate information.
• Wait for automatic removal after (about) seven years on most business credit reports. Judgments typically remain on business credit reports for about seven years from the date entered. Again, even if it no longer shows up on your credit reports, the judgment remains searchable in court records indefinitely in most states unless vacated or expunged.
• Request expungement from court records if your state allows it. Some states permit judgment expungement, which removes the judgment from public court records entirely, under certain circumstances, such as when the judgment was satisfied years ago and you can show rehabilitation. Consult an attorney to determine whether you qualify. If eligible, you may be able to file a petition for expungement with the court. If granted, the court seals or destroys judgment records, making them no longer searchable.
• Appeal the judgment if you believe it was wrongly decided. If the judgment resulted from a trial you believe reached the wrong conclusion, you may have the right to appeal to a higher court. Appeals must typically be filed within 30 days of the judgment and require strong legal grounds like errors of law or abuse of discretion by the trial judge. Consult an attorney immediately if you're considering an appeal, as this isn’t likely something you want to do yourself. 
• Satisfy judgment through bankruptcy if you can't pay. If the judgment amount is more than you can possibly pay, bankruptcy may discharge the debt. Chapter 7 bankruptcy typically discharges judgment debts entirely, removing your obligation to pay. Chapter 11, Chapter 12, or Chapter 13 bankruptcy may allow you to pay a portion through a repayment plan. You will end up with a bankruptcy on your credit reports, but it can offer a financial fresh start. 
• Monitor credit reports after satisfaction or removal. After paying, settling, or vacating a judgment, monitor your business credit reports to ensure the updates appear correctly. Creditors don’t always update judgment status promptly. Check your credit reports 60 to 90 days after you paid the debt to verify it’s listed as paid or satisfied.

Consult an attorney. It’s always a good idea to get help from a legal professional, especially if the judgment is large, involves complex legal issues, or resulted from circumstances where you believe you have strong defenses. They may be able to help advise you on the best strategy, file appropriate motions, negotiate with creditors, and represent you in court proceedings. Attorney fees may be worth the cost compared to the credit damage a judgment can cause if left unresolved.

How long do judgments stay on public record?

You may be concerned about how long someone can discover a judgment against you or your business, and that is a valid concern. As we mentioned earlier, even if judgments don’t appear on your credit reports, creditors may be able to find them through public records searches.

There are three components here to understand, and each one can vary based on state law, the type of debt (consumer or business debt, for example), or even the amount of the judgment. 

1. Enforceability 

If you or your business are sued, you’ll want to understand how long the judgment can be enforced. Remember, judgment creditors may have avenues to collect that other creditors don’t, such as seizing funds from bank accounts.

This will vary by state — ranging from five to 10 years to one or two decades, or longer. The period of enforceability may vary the type of debt or the size of the debt. 

Example: In Alaska, an action on a judgment must be brought within 10 years, while in Hawaii, a six-year period applies to actions based on judgments in out-of-state courts but 10 years applies to in-state judgments. 

2. Renewability

In many cases, judgments can be renewed by the creditor. If this happens, they have a new time period to enforce the judgment. 

Example: In Illinois, for a consumer debt judgment (entered after Jan. 1, 2020), a judgment can be enforced for seven years, and it can be revived once for another seven years. The creditor has up to 10 years to request the renewal, which creates a maximum 17-year enforceability period.  

3. Records retention

Finally, there is the question of how long this type of judgment may be retained in the public record. In most states they can be retained indefinitely. 

Example: In New York, some records may be retained for 20 years and extended an additional 10. 

If you are sued, consult an attorney or your state Attorney General’s office to find out how long the judgment can be enforced, whether it can be renewed (and how often), and how long it will be retained. This may affect how you decide to address the debt. 

And if you have an outstanding judgment, ask the lender about their policy on older judgments — they may be willing to consider your explanation.

Frequently asked questions

How do I get a judgment removed from my record?

Most judgments can't be completely removed from court records — they remain permanently in most states. But they don’t remain on business credit forever. And even with a judgment on your credit reports, you may be able to start rebuilding your credit.

Consider paying the judgment in full. When you do, the creditor should file satisfaction documents with the court. This changes its status from unpaid to satisfied, which is significantly less damaging. Business credit reports typically remove satisfied judgments after seven years.

To have a judgment removed, you generally need to prove a legal error — such as improper service of the lawsuit, a mistake by the court, or mistaken identity. You’ll need to file a motion with the court requesting that the judgment be vacated.

If you can’t pay the full amount, consider negotiating a settlement for less. Be sure to get the agreement in writing, including confirmation that the creditor will file satisfaction documents once payment is made.

How is a judgment different from a lien?

You can think of a judgment as the court declaring that you owe money, while a lien is a claim on specific property to secure that debt.

They connect in this way: A creditor sues you and wins. The court enters a judgment. The creditor can then place a lien on assets such as your house, car, equipment, or bank accounts, depending on state laws and available remedies. The lien gives them the right to seize or sell that property to get their money, or to get paid when you sell or refinance the property. 

Not all judgments create liens, and not all liens come from judgments. Your mortgage is a voluntary lien you agreed to, for example. A UCC filing on business assets is also a voluntary lien. A judgment lien, however, is forced on you or your business after you lose a lawsuit.

Can a business have a judgment against it?

Yes, a business can have a judgment issued against it. Vendors, landlords, and lenders can sue businesses for unpaid bills, broken contracts, and lease violations, etc. If the suing party wins, the court enters a judgment against the business that was sued. 

These judgments may be included in business credit reports and lower business credit scores, potentially for years. 

If you operate as a sole proprietor, a judgment against your business is a judgment against you personally, because there's no legal separation between you and your business. But if you operate as an LLC or corporation, the judgment will be against the business. 

The catch is that many lenders require personal guarantees. If you personally guarantee a business loan and the business gets sued, the creditor may obtain judgments against both your business and you personally. 

Do satisfied judgments still affect credit?

Yes, satisfied (paid) judgments can still show up on business credit reports and in public records. 

The difference: It shows as satisfied or paid instead of outstanding. Lenders may view this as less risky — you eventually paid, even if it required a lawsuit. This can be especially true as they get older. 

If you have a judgment against your business, think carefully about whether it makes sense to pay or settle it. (If that’s not financially feasible, bankruptcy may be another option.) It won't disappear from your record, but it may turn a major red flag into a resolved issue that lenders are willing to overlook.