Public records can have a very negative affect on a credit score. If a person has any filed against them, they should be aware of the following information.
What is a Public Record?
Public records refer to liens, bankruptcies or civil judgments that have been documented by federal, state or county courts. These records are considered public information and can be accessed by anyone. These records are also reported to the credit bureaus (TransUnion, Equifax and Experian) which are the entities that provide credit report history to mortgage lenders, property managers, employers, and other parties evaluating a person’s credit worthiness.
Criminal records are also considered public records, however, criminal records are not reported to the credit bureaus and will not show up on a consumer’s credit report.
How will a Public Record affect a Credit Score?
Payment history determines 35% of a person’s credit score. Public records fall into the payment history category so the presence of these records can have a large negative affect on an overall score. These events are considered serious but older items and items with small amounts will count less than recent items or those with larger amounts.
How Long will a Public Record Stay on a Credit Report?
Chapter 7 bankruptcies are reported on a credit report 10 years from the filing date because the individual is not required to repay the debt.
Chapter 13 bankruptcies are deleted 7 years from the filing date because the individual is required to repay at least part of the debt as determined by the court.
Civil judgments are filed when a person is sued for a monetary reason and they lose. Basically the individual owes a debt according to the court which is then reported on their credit report. Civil judgments stay on a credit report for 7 years from the filing date.
Tax liens are filed by state, county or federal courts when an individual has not paid their taxes. Unpaid tax liens can remain on a credit report for 15 years from the filing date. Paid tax liens remain on the report for 7 years from the paid date.
What can a Person with Public Records do to help their Credit score?
If a public record is inaccurate, the individual should follow the directions outlined by the Federal Trade Commission here: http://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports
If the public records are accurate, the individual should make sure they’ve paid overdue accounts. The individual should then contact the three credit bureaus (TransUnion, Equifax and Experian) with documentation of the payments so the information on the report can updated to show the items as paid. While the records will still show on the credit report for the stated length of time, paid items will have a much less negative affect on a credit score.