Does filing a collection defense lawsuit hurt my credit score?

Filing a collection defense lawsuit in California does not necessarily hurt your credit score. Your credit score is part of your overall credit report, which is created and maintained by credit reporting bureaus. The Fair Credit Reporting Act prohibits these bureaus from considering any account or dispute that is the subject of a pending lawsuit. This means that, while the collection and dispute will appear on your credit report, filing a collection defense lawsuit will not directly affect your credit score. However, the collection defense lawsuit could still have an indirect effect on your credit score if the dispute is resolved in your favor. If the debt is canceled or wiped away, the creditor is required to report this to the bureaus and to mark the debt as “paid” or “closed.” This will have a positive effect on your credit score, since the debt is no longer considered to be outstanding. Additionally, if you had any late payments or delinquencies associated with the debt, those will also be reported to the bureaus as “paid” or “closed,” which can also result in a positive effect on your credit score. However, it is important to note that filing a collection defense lawsuit does not guarantee that the debt will be canceled or wiped away. If the dispute is unsuccessful, then the debt will remain on your credit report and can still potentially hurt your credit score.

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Does filing a collection defense lawsuit hurt my credit score?

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