Tuesday, February 23, 2016

Small Claims Court Kills Your Credit Rating

Even those who ends up winning in small claims court usually aren't happy about it. After the time, expense and general frustrations facing the other party, about 15% of all cases filed in small claims court actually land in front of a judge.  Of those, not all are ruled in your favor. If you win, you might not ever collect the amount for which you sued.  But if you lose, it can be even worse:

Most people don't know that if you lose in small claims court, credit rating agencies will use that loss and can downgrade your credit rating even if you pay off the entire amount in a timely fashion.

That's right, in the United States, court decisions are public record.  Anyone can go through them to see who's sued whom, when they sued, for how much -- and whether they won or lost.  The bad news is that credit scoring agencies are constantly reviewing those records and updating them.

This is one more reason why you want to avoid small claims court and use an online settlement service instead.

With an online settlement service, there are no courts, no lawyers, no mediators or arbitrators. You simply file your case online at your convenience. The other party is notified and does the same. After that, the online settlement service calculates the best amount for the two of you.  Once you both agree, the owing party pays the settlement fee by credit card and the other party gets his check within ten business days.

The best part of an online settlement service, however, is that its records are not public.  Even though its Certificate of Final Resolution is totally binding and legal as a court decision, it's completely outside and independent of the court system.  That means no credit company can access its record, keeping your credit score healthy and strong.

More and more people are opting for online settlement services instead of small claims court.  Shop around to see how much faster and better they are for you, too.

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