Importance of Credit Reports

Credit reports are sensitive financial matters withholding crucial personal informations required for specific goals achievement. With a good credit report that is high in FICO scores, a person can attain loan with minimum trouble, minimum time and minimum interest rates. He can also take home on rent on priority basis, purchase vehicles and property on installments, purchase insurance policies and get a job.

Getting so many benefits is possible through a good credit report, but if the credit report is bad with gray and red areas, then there are certain limitations in getting benefits. Once a person starts missing payments and become habitual of delaying them, ignoring notices from lenders and creditors, he puts himself in trouble. A more critical situation arrives when a creditor files a case against a debtor after several payment reminders and notices.

Judgement- A Verdict Against Debtor

Whilst seeking the case, when the verdict is given in favor of the creditor resulting in its appearance on a debtor’s credit report is known as a judgement. A judgement is sought by the creditors because it is an enforced way of demanding due payments. It can be recorded and put into action, recording it makes it a public record.

The next step from the creditor can be the demand of recovery of unpaid over dues. It will be the court’s next step to evaluate assets namely Discovery of assets. This is a highly disgracing situation when a debtor’s assets are put for Discovery, as the court can announce a sale of the debtor’s assets to recover the pending dues.

It is however a risky deal as the house ordered for liquidation may not earn as much as required to pay off the credits. Also the lender might not be in the position to realize full payment. This situation is not favorable at all, so it must be an utmost effort to avoid such a situation. After the passing of a judgement, it is then an obligation of the mortgage underwriter to review the whole situation to assess whether the situation has been a real one or a momentary slump that caused a crash to the debtor.

Leverage after Judgement

Apart from its crucial effects, there is leverage at this point too. If the creditor, after having the judgment in his favor, is satisfied by the payment schedule of the debtor, the debtor can earn a first position title amongst the buyers. Also, if the house is of much value, then the payment scheduled should be followed instead of letting it go.

Judgement and FICO Scores

The appearance of a judgement onto a credit report is devastating as it damages FICO scores to a great extent. Judgments can be of other kinds too other than mortgage matters, such as child support, credit card default, car repossession, and civil and small claims. They can stay onto a credit report for 7 years from the date the judgement is filed. The underwriter must see the case file with care and must consider all possibilities to settle down the matters.