The next time you review your credit reports you’ll likely see a section titled “Public Record Information.” The credit reporting agencies routinely include certain financial related public records in their consumer credit reports. If you’re unfortunate enough to have public record information on your credit reports there are several things you need to know and, unfortunately, the news is mostly bad.
When a public record appears on your credit reports it is likely to cause considerable damage to your credit scores. Public records are commonly included in any list containing derogatory credit entries. The list of public record options that can appear on credit reports is limited to three.
First off, while there are many different types of public records, there is no such thing as a good public record when we’re on the topic of credit reporting. They are tax liens, judgments, and bankruptcies. The tax liens can be either state or Federal and the judgments can be in any court jurisdiction including Federal or state.
Consumers are often very confused about the way the public records find their way onto credit reports. Traditional credit accounts such as loans and credit cards appear on credit reports because the lender reports them to the credit bureaus. Public record credit reporting works in a very different manner.
As the name suggests, public records are public information. Anyone can see them including me, you, your neighbors, and any other interested party. The credit bureaus themselves actually seek out public record information in order to include them on credit reports.
Public records vendors and electronic access to court records, such as PACER, are used to collect information about bankruptcies, tax liens, and judgments
Not only do public records have the potential to cause damage to a consumer’s credit scores but also they have to potential to damage those credit scores for a very long time.
Like any other type of negative information that appears on credit reports, the Fair Credit Reporting Act defines how long a public record is allowed to remain on a consumer’s credit report. Credit reporting limitations vary depending upon the type of public record being reported. Here is a quick guide.
1. Judgments – Judgments must be purged from credit reports 7 years from the date filed. Paid or unpaid, satisfied or unsatisfied, 7 years is the limit. However, if a judgment is re-filed with the court it will be given a new filing date and potentially cause it to remain for 7 more years.
Vacated judgments are removed from credit reports immediately. Vacating a judgment means it never existed.
2. Bankruptcy – Consumer bankruptcies have arguably the most confusing statute of limitations when it comes to credit reporting since the credit reporting “time limit” changes based upon a variety of factors. Chapter 7 bankruptcies can remain on credit reports for 10 years from the filing date.
Chapter 13 bankruptcies can remain on credit reports for 7 years from the discharge date; however, they cannot be reported for longer than 10 years from the filing date. In most cases a Chapter 13 bankruptcy takes several years to discharge so most of them remain on file for 10 years, like Chapter 7 bankruptcies.
3. Tax Liens – Paid and released tax liens are removed from credit reports 7 years from the date of release on the lien, not the date filed.
Federal tax liens that have been withdrawn are removed immediately, although the consumer will typically need to inform the credit bureaus about the lien withdrawal in order to have it removed. Unpaid tax liens can remain on credit reports indefinitely.