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A favourable credit report is vital for both individuals and businesses wishing to start new lines of credit or take out loans. A good credit score will make it much more likely for you to get the loans that you want. However, any debt repayment issues, especially those that result in legal proceedings, can negatively impact your credit report and deter future lenders. Therefore, this article explains how you can remove a court judgment from your credit report in New Zealand.

What is a Credit Report?

When someone considers whether to grant you a loan or some other major undertaking, having some background to your borrowing history and financial matters is useful. A credit report provides them with this background, as it details your general credit history, covering things like:

  • your current credit accounts;
  • any defaults on repayments (which means whether you have failed to repay any debt);
  • general repayment history;
  • things about you that are public record;
  • court judgments relating to debt proceedings;
  • hardship applications;
  • writs or summons;
  • overdue accounts;
  • any outstanding fines or reparation payments;
  • whether you have declared bankruptcy; and
  • details about payments for phone, electricity and gas accounts.

Credit reporting agencies gather and store this information, which then directly determines your credit score. This score is between 1 and 1000, and the higher it is, the more creditworthy you are. Your score represents how likely you are to repay any loans or debts, which a lender will look on more favourably when it is higher. 

Certain people like lenders or landlords can ask agencies for your credit report, but they will need your consent to do so. Some parties, such as debt collectors and certain government agencies, can ask for credit reports without needing your permission.

Avoiding a Negative Credit Rating

Your credit score can change over time, according to how you manage and repay your debts. A higher credit score is more favourable, so you want to avoid things that would potentially lower it, such as missing debt repayments or having outstanding fees. A low credit score could contribute to:

  • unsuccessful loan applications;
  • more difficulty finding landlords that will rent to you; or
  • difficulties with employment and hiring.

Therefore, you want to be careful of what can lower your score and raise red flags in your credit history. Helpfully, you can improve your credit score over time by:

  • paying bills on time;
  • paying off credit cards regularly;
  • cancelling unused credit cards; and 
  • limiting credit applications.

However, credit reporting agencies cannot keep certain kinds of information in your credit report forever. For example, if a bankruptcy ends, they can only report on this for four years after the fact and store that information for five years. After that, the information should not remain in your credit report.

Court Judgments and Credit Reports

Importantly, court judgments exist in your credit reports for lenders to see, and they can contribute to determining your credit score. As such, if lenders see that you had to go to court for failing to pay back a debt, they are much less likely to want to engage with you.

Credit reporting agencies gather court data, which summarises any successful legal action against you that relate to debts you have owed. The existence of the court judgment is available in the public record, but its outcome is not. However, credit reports detail this, including any payment or settlement amounts. Crucially, court judgments can stay on your credit report for five years after the fact.

How Can I Remove a Court Judgment From My Credit Report?

There are three credit reporting agencies in New Zealand. These are:

  • Equifax;
  • Centrix; and
  • illion.

They all have a legal obligation to ensure that the information they keep about you is:

  • accurate; 
  • up to date;
  • complete;
  • relevant; and 
  • not misleading.

If there are any errors about court judgments in your credit report, such as a mistake about whether you settled the debt, you need to contact one of these agencies. You will need to offer proof of your repayment, which you can get from the party you owed money to. However, once the agency confirms this validity, they will only update your records rather than remove the court judgment entirely in most cases.

Thus, removing a court judgment from your credit report entirely may require the court to set aside the initial debt claim against you. They will only do so if there has been a miscarriage of justice. This refers to when the initial court judgment was wrong or unfair. You will require a lawyer to help you with this process. Fortunately, if you are successful, the credit reporting agency should remove the court judgment from your credit report once you notify them.

Key Takeaways

A credit report is a summary of your credit history, which certain parties, like landlords or employers, can ask for to investigate your background. Court judgments can contribute to negative credit history, but, in most cases, you can only remove them when another court sets them aside. If you want to know more about or would like some help with your credit report, get in touch with LegalVision’s disputes and litigation lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is a credit score?

A credit score is a number that represents your creditworthiness for future lenders or other parties interested in your credit file. A higher number is meant to indicate that you are more likely to pay back your debts.

How do court judgments affect my credit history?

If there is evidence of someone taking you to court for failing to pay back a debt, this would not be favourable for your credit history. Lenders want evidence that you will pay them back, and having such a record would not help your case.

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