Privacy Law – Judgments and Credit Reporting

Credit reporting agencies are often utilised by lenders as part of a loan approval process. If you default on the loan the lender will issue notices, which if ignored may then result in the lender registering a default on your credit rating.

Equifax is the largest credit reporting agency and holds about 85% of the consumer credit reporting market but there are smaller players in the market.

A Court can also record a default on a person’s credit rating when legal proceedings have been issued to recover a debt and a judgment has been issued against the defendant.

A judgment that is unpaid will remain on a credit report for a period of 5 years. A judgment that has been paid will remain on the credit report for 2 years.

If a Court judgment is recorded on the credit report, the responsibility is on the affected party to take steps to provide sufficient information to a potential lender or other interested parties to prove that the debt has been repaid.

A judgment that has been paid is not automatically removed from a person’s credit file and remains visible to prospective lenders and financial service providers.

The only circumstances in which a judgment debt is removed from a person’s credit report is to apply to a court to set aside the judgment. This can be done by application or the simpler method of filing consent orders by asking the judgment creditor to consent to the court making orders that the judgment debt has been paid in full and that credit reporting bureaus should update their records.

Often judgment creditors can be reluctant to consent to set aside a judgment even when it has been paid in full. The judgment creditor is not obliged to consent.

NSW Credit Law can negotiate with judgment creditors to assist you in setting aside judgments and having the default listing amended on your credit history.

Beware of credit repair organisations that offer such services but charge exorbitant fees and are unregulated.

Always use a solicitor to assist in negotiating with creditors and drafting consent orders.

Should you require assistance please contact Paul Thorndike on 02 4206 8951.

Paul Thorndike