Public Records on a Credit Report: All You Need to Know
A public record on a credit report can have a more deteriorating effect on credit score than many missed or late payments. In fact, public record information, such as bankruptcy, can remain on a credit report for 7 to an indefinite number of years, and prevent the individual from qualifying for a loan. That’s why it is essential to check your credit report regularly, and ensure it has no inaccuracies in the form of a public record or any other negative item. Here’s what you need to know about public records and their impact on credit score.
What are Public Records?
Public records are court filings that are viewable to the public. Maintained by Federal, County and State governments, these legal documents are accessible to lenders and other public institutions. Whether paid or unpaid, public records always reflect as negative information on the credit report. Consequently, any public record information can decrease the credit score and the creditworthiness of a wishful borrower.
Types and Effect on Credit Score
FICO only considers public records that are financial in nature, and therefore, non-financial public records are never included in credit reports. In general, the credit reporting agencies include three types of public information. These are:
The duration for which a bankruptcy may reflect on an individual’s credit report as public information depends on its type. If an applicant files for Chapter 7 bankruptcy, all the debts that they are not required to pay anymore reflect under public records for 10 years. On the other hand, under Chapter 13, the applicant has to pay at least a portion of their debt through a repayment plan. This type of bankruptcy remains on their credit report for 7 years.
Tax liens mean the failure to pay income tax or tax on real or personal property. Unpaid tax liens may reflect on the credit report for 10 years to an indefinite period. Though paid and released tax liens should be removed from the credit report seven years from their filing date.
Judgement on any credit report means the involvement of the person in a lawsuit and their obligation to pay a certain amount to the other party. Judgements can remain on a credit report for as long as 7 years.
The Way Forward
A public record, whether paid or unpaid, can significantly impact your credit score and only time can decrease its effect. Therefore, before any obligation enters the courthouse and appears as a public record on your credit report, find an alternative to avoid the possibility. Speak to the company or the person you owe the money and try to arrive at a settlement. If they agree, get a confirmation in written that states that they are ready to remove the debt account from your credit report in return for payment.
Public records on credit reports always mean negative information that hampers credit score. That’s the reason it is important to obtain your credit report from all three major credit bureaus from time to time, and if you notice any erroneous items, dispute them with the bureau. If you need expert assistance, we, at Repair My Credit Now, are here to help. Our in-house credit repair professionals can tailor effective solutions to ensure you never have to wonder how to fix your credit score. You can reach us at (888) 469-7372, or fill out our contact form and we will take it from there.