Judgments and credit reports
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I’ve just settled a judgment, and my credit score went down. Has anyone experienced the same? How long will it take for my score to get back to where it was? I’m just a few points from qualifying a mortgage…
The settlement has noting to do with your score going down
Settling that judgment did NOT impact your score. Your score was already damaged because of the judgment itself. Payments made on judgments are NOT reported to the credit bureaus, so that settlement is not reported and this is why it’s not the culprit.
Only when the judgment is paid in full, the judgment holder sends the court paperwork showing the judgment is satisfied. The judgment is then updated to show it is paid.
Something else must have caused your score to drop. It could be a difference in your debt-to-limit ratio, or a lack of utilization reported for credit cards. If you paid off an installment loan, it would count less in your score calculation and can account for the drop.
By the way, even if your score gets back to where it was, you’ll find it impossible to get approved until that judgment is paid. Mortgage lenders require all derogatory items to be resolved these days.
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