? for Accountants/financial/credit gurus

[slapthefunkyfour]

I know someone on here can help me.

 

I recently applied for a car loan, and the only bad thing on my credit report is a public record for a civil judgement for $795. In December it will be 7 years old. I know from experience that non-public record credit problems dissappear after 7 years, but are public records the same?

 

Should I pay this off or will it go away after 4 months?

 

That is all, thanks.

[Svi]

If I'm not mistaken, it's 7 years for anything like that. I'd just wait-and $795 shouldn't affect your credit that much.

[liko]

That judgement counts as an outstanding debt. Like any other debt you have, it counts against your leverage ratio (outstanding debt over credit limit) as long as it is still collectible (judgements often have a shelf life after which, if active steps have not been taken to collect it, is null and void). It's not going to hurt your credit like a late payment or a default would, but it will reduce your credit score slightly due to the drop in leverage. Consider it like having a $795 balance on your credit card. Not major, but it won't go away until it's paid. In such a case I would apply now; if that's the only bad mark against your credit history you will still have excellent credit.

 

Now, if that judgement were turned over to a collection agency and the collection agency eventually wrote it off, that counts as a default. That is a major ding on your credit, but it WILL go away after 7 years. In that case, wait till December.

[slapthefunkyfour]

Another thing. When I was a kid I did lots of dumb things like getting a credit card and maxing it out and then never making a single payment. I had a motorcycle repossessed. Those things have all dropped off my credit report cause it was longer than 7 years ago, and this civil judgement is the ONLY thing on my credit report. So, basically, I almost have a clean slate to start over and responsibly use credit like a mature adult.

 

I would really like to have this drop off the report so I have no bad dings whatsoever.

 

I can't remember if it was turned over to a collection agency or not. I'll have to look again.

 

 

Thanks.