If you are involved in a personal injury lawsuit in Oklahoma, you may be wondering how it will affect your credit score. The short answer is that it depends on a variety of factors. In this article, we will explore how personal injury lawsuits can impact credit scores and what you can do to protect your credit during the process.
Table of Contents
Factors that Affect Credit Scores
Before we dive into how personal injury lawsuits can affect credit scores, it is important to understand the factors that make up a credit score. According to Experian, one of the three major credit reporting agencies, credit scores are determined by the following:
- Payment history: The most important factor in determining credit scores is payment history. This includes whether you make payments on time and whether you have any outstanding debts.
- Credit utilization: This refers to how much debt you have compared to your credit limits.
- Length of credit history: The longer you have had credit, the better it is for your score.
- Types of credit: Having a mix of credit, such as credit cards and loans, can improve your score.
- New credit: Opening new accounts can temporarily lower your score.
Personal Injury Lawsuits and Credit Scores
Now that we have a better understanding of credit scores, let’s explore how personal injury lawsuits can impact them. There are a few different ways that a personal injury lawsuit can affect your credit score.
Medical Bills
If you are injured in an accident, you may incur significant medical bills. If you are unable to pay these bills, they may be sent to a collection agency, which can negatively impact your credit score. However, if you are involved in a personal injury lawsuit, your medical bills may be covered by the other party’s insurance company, which can help protect your credit score.
Lost Wages
If you are unable to work due to your injuries, you may lose income. This can make it difficult to pay bills and can lead to missed payments, which can negatively impact your credit score. However, if you are awarded compensation for lost wages in your personal injury lawsuit, you may be able to avoid missed payments and protect your credit score.
Settlements and Judgments
If you win your personal injury lawsuit and are awarded a settlement or judgment, it is possible that the other party may not be able to pay the entire amount immediately. In this case, they may enter into a payment plan with you. If you do not receive payments on time, this can negatively impact your credit score.
Protecting Your Credit during a Personal Injury Lawsuit
There are steps you can take to protect your credit score during a personal injury lawsuit. These include:
- Finding out what medical bills will be covered by insurance. If your medical bills are covered, you can avoid them being sent to collections, which can harm your credit score.
- Working with an attorney to ensure that your lost wages are included in your lawsuit. This can help you avoid missed payments and protect your credit score.
- Negotiating a payment plan that works for both you and the other party. This can help ensure that you receive payments on time and protect your credit score.
Conclusion
In conclusion, personal injury lawsuits can impact credit scores in a variety of ways. By understanding the factors that make up a credit score and taking steps to protect your credit during the process, you can minimize the negative impacts a personal injury lawsuit may have on your credit score. Remember to work with an experienced attorney who can help guide you through the process and protect your rights.