A court can award a debt collector a civil judgment for the amount you owe plus interest, fees and court costs if a judge deems the charges are valid and warranted. Judgments, liens and bankruptcy severely impact credit scores and can make it difficult to secure employment or obtain a home loan.

Definition and Process

The legal definition of a judgment, according to the Free Dictionary, is "A decision by a court or other tribunal that resolves a controversy and determines the rights and obligations of the parties." A creditor who files a lawsuit against you is the plaintiff. You are the defendant. You will receive a copy of the court documents filed against you and will be given a scheduled court date, according to FreeAdvice.

In court, you will be asked to explain why you believe you do not owe the debt or why you have not paid it in accordance to the original terms. Likewise, the plaintiff must make his case to the judge and provide evidence as to why you do owe the debt. After each side has presented its case, the judge will rule in favor of one of the parties. If the judge rules in favor of the plaintiff, it means you now have a judgment against you and have a court-ordered debt that must paid in a timely manner.

How Judgments Appear on Credit Report

Three types of civil actions appear on your credit report. They are bankruptcies, tax liens and court judgments. Small claims judgments are reported to all three credit bureaus -- Equifax, Experian and TransUnion -- as they are debts validated and enforced by the court system. MyFICO explains judgments can adversely affect your credit score and also cause lenders to pause when considering your request for a loan.

How Judgments Are Paid

While small claims court rules and procedures vary from state to state, Lawyers.com says most courts allow immediate payment of the debt but also facilitate a payment plan. If a payment plan is agreed upon, it is imperative you stick to it, as not making the scheduled payments can result in further legal action.

If further action is taken against you, Lawyers.com explains, creditors can put a lien on your property or make a request to the court to garnish your wages until the debt is paid in full. Each state has specific limits on how much of your wages can be garnished and only one garnishment may be executed against your wages at a time. The Street and Experian confirm that credit bureaus do not receive further information about a judgment if a lien or garnishment is granted. It still appears on your credit report as a judgment.

Removing a Judgment From Your Credit Report

According to MSN Money, a judgment against you will remain on your credit report for seven years. If you can that you paid the bill before it went to collections, that it is not yours or that the statute of limitations (seven years) on the debt has expired, you may be able to have the judgment removed from your credit report.

It is important to routinely check your credit report so you are aware of any credit score issues.To get an accurate and complete look at your credit, Bankrate suggests requesting a merged credit report, which will contain reports from all three agencies. You may also request a report from each agency individually.