Judgements and defaults are two glitches that can come across your path when dealing with debt. These two aspects are not favoured on a consumerís credit records but can be avoided if debt issues are handled correctly. By avoiding judgements and defaults you will be able to maintain healthy credit and financial records.
Credit bureaus keep stringent records of consumer behaviours and pay particular attention to judgments and defaults. Effective debt control management lies in understanding what these are and how long they will affect your record Ė and how to prevent them.
A judgment occurs when a consumer has lapsed in payment and the creditor approaches the courts to settle it. It involves a legal course from the initial application, to a summons, and should the consumer not respond or be found guilty, a judgment. Consumers should be aware that judgments will show on their credit record for up to 5 years, and will have a hugely adverse effect on their credit score. In order to prevent this from happening, consumer should apply debt control management by paying their debts on time and responding immediately to any legal communication sent to them by their creditors.
Creditors, like consumers are human and can make mistakes, therefore it is imperative to address a summons should it be faulty, instead of ignoring it. A default is a listing that appears on consumerís credit score when they do not pay their accounts. It shows on the consumerís credit profile for two years and can only be removed upon instruction from the courts or creditor once the consumer has provided proof of payment.
Defaults are seriously harmful to a credit score as it indicates that the consumer is not reliable in terms of payment. Avoid defaults by not delaying payment, every late payment of an account shows on an account.
Effective debt control management will result in little no defaults on a consumerís credit score, and it is imperative that consumers do their level best to prevent this from occurring by paying their debts on time, or seeking alternative help as soon as a problem arises.