Affecting the Debtor’s Credit Score
How a Judgment Affects a Debtor’s Credit Score So That You Get Paid.
Often we have a debtor call because an abstract is preventing them from obtaining credit. Their credit score has been affected by an abstract of the judgment in their credit file.
The abstract usually causes a more noticeable drop in score than that of a similarly sized loan, for instance. Taking out a new loan signals that a consumer has voluntarily sought out credit and willingly agreed to pay that money back over time. Additionally, the presence of a judgment is cause for some of the corporate landlords in Texas to reject a rent application.
A judgment is usually perceived as a consequence of prior mistakes, rather than being indicative of financial management. At best, a judgment will be viewed as another obligation that could keep the debtor from repaying other items on their credit report, such as credit cards and loans.
Due to this distinction, judgments, like other reported public records, are harmful to credit scores and usually have an immediate effect at the time they are recorded.