What is the procedure by which a civil money judgment gets put on the judgment debtor’s credit report?
Does the judgment creditor contact the credit reporting agencies?
Do credit reporting agencies have people who read every court file ever in search judgments, then match those judgments up to credit files? That seems like a bunch of work.
Generally, it’s up to the creditor to provide the information to the reporting agencies. Most large businesses that extend credit have a monthly reporting system where they send an electronic file to the big 3 credit bureaus (Experian, Equifax and TransUnion) containing updated information on all their accounts. If it’s a Mom & Pop type business, or a private individual, it may not ever get reported.
I know little about the business operations of credit agencies, but I am a lawyer. When I obtain a judgment for a client, SOP is to record that judgment as a lien with the county recorder of deeds. That lien attaches to any real estate owned by the judgment debtor in the county. (This assumes that there isn’t some clear, reliable alternative way to collect the judgment, such as insurance.)
So at least in my state (Illinois), the credit agencies wouldn’t have to search case files. Further, real estate lien information is collected for other reasons, so credit agencies presumably obtain this data in already-organized form, with no need to send foot soldiers to each county.
Based on discussions I’ve seen in credit-oriented web sites, Random’s belief that the credit agencies buy the information from 3rd parties who warehouse such information is accurate.
I’m a lawyer too, and the reason I ask this is because I want to be able to do something less than a judgment debtor examination but more than just sitting on a real property lien for years and years waiting for my clients to get paid.
I have no idea how long it would take a judgment to “naturally” pop up on a debtor’s credit report or even how that process works. If there’s some way to get the judgment to come up on the credit report sooner, then the debtor has more incentive to pay, and my clients are more likely to get paid sooner.
OTOH, it may prevent a debtor who wants to pay, but is currently unable, from being able to borrow to pay the judgment. Hmmm…
In your case, you should contact the credit agencies (check their web sites for phone numbers) to see how you can enter credit report information into their system. I know that they have mechanisms for merchants to set up account/passwords, etc. but not sure about one-time transactions.
Bear in mind, though that once you report credit information about an individual you have the responsibilty to update the information whenever payment are made, or the status of the debt changes.