A credit report contains information about your credit history. They are created by credit bureaus, such as Veda, and used by lenders to help them determine whether or not they will grant you credit. Repayment history, credit enquiries, overdue accounts listed as a payment defaults, writs and summons and court judgments are all recorded on your credit report. A court judgment will remain on your credit report for five years even if you have repaid your debt, so it is important that you know what action you can take. This article will explore the three steps to have a judgment removed from your credit rating.
1. Write to the Credit Bureau
The first step is to obtain a letter or document from your credit provider confirming that you have fully satisfied the judgment debt. You can provide this letter to the credit reporting agency requesting that they remove the judgment from your record. This step will be sufficient for some credit reporting agencies.
However, some other credit reporting agencies, such as Veda, will simply add a notation to your credit report stating that you have repaid the judgment debt. While future credit suppliers can see that you have paid the judgment debt, the fact that the judgment is still recorded on your credit report will deter most lenders from giving you future credit.
2. Get a Signed Consent Order
Your next option worth pursuing is to request your judgment debtor sign appropriate consent orders. The consent orders should state that the parties agree to set aside the judgment and to discontinue the proceedings.
If the judgment debtor agrees to sign the consent orders, they will need to file them with the appropriate court registry. The court will consider the consent orders, and if appropriate, will make the orders and advise the parties that they have entered them.
Once the parties have entered the orders, the credit reporting agency will be automatically notified, and will then update their records.
3. Apply to the Court Seeking to Set Aside Judgment
In some instances, a judgment debtor will not agree to sign consent orders. Once a judgment has been entered, the judgment debtor has no obligation to consent to set aside the judgment.
For example, government agencies such as the Australian Taxation Office and local councils have policies in place which prevent them from consenting to setting aside judgment debts.
However, in most instances, they will not oppose any application made to the court seeking to set aside the judgment (provided that the debtor has paid any costs orders associated with the original debt).
An application to set aside a default judgment must address the following:
- The reason you failed to file a defence within time (e.g. the creditor did not serve you with the statement of claim);
- Any bona fide defence you have in respect of the claim; and
- The reason you have delayed in making the application (if applicable).
Where the debtor has paid the judgment debt, there is an assumption that you do not have a bona fide defence to the creditor’s claim. This can make getting an order to set aside the default judgment very difficult.
If you have reached the point where you have exhausted all other options, and you are considering making an application to the Court, it is worth seeking advice about your prospects of success before incurring any additional costs. If you have any questions or assistance in getting a judgment removed from your credit rating, get in touch with our dispute lawyers on 1300 544 755.