What is a public record on credit report? A public record on a credit report carries a lot of weight around the credit/loan world. Credit reporting agencies gather information from various sources, including public records, to create credit reports. Lenders, landlords, and other organizations utilize these reports to determine a person's creditworthiness.
- A public record on a credit report is information that is collected from public sources and is available to credit reporting agencies.
- After major delinquency, a creditor may pursue legal action against you, which may become a matter of public record. In some instances, the record might be reflected on your credit reports.
- A public record is added to a person's credit report for bankruptcies, foreclosures, tax liens, and judgments.
- Most bankruptcy records remain on credit reports for seven to ten years, whereas foreclosure data can remain for seven years.
A person's credit report includes information on their credit scores, credit history, payment history, the debt amount, and any negative events, such as public records. The information falls under negative public records and can significantly impact a person's credit score. So what does the record entail? This article will explain what the public record comprises and its importance.
What Is a Public Record on Credit Report?
A public record on a credit report is information that is collected from public sources and is available to credit reporting agencies. The information may include bankruptcies, foreclosures, tax liens, and judgments.
The records are usually created when a person fails to meet financial obligations and faces legal action. For instance, if an individual fails to pay taxes, the government may place a tax lien on their property, which becomes a public record.
When Do You Get a Public Record?
The record is added to a person's credit report under the following circumstances:
Bankruptcy is a legal process by which an individual or business can eliminate or reorganize its debts. A bankruptcy can remain on a person's credit report for up to ten years.
Under Chapter 13 bankruptcy, at least a portion of a person's debts is repaid. Under Chapter 7 bankruptcy, none of the debts included in the filing are repaid.
Foreclosure is a legal process by which the lender acquires property ownership. Foreclosures can remain on credit reports for up to seven years.
A tax lien is a claim made by the government on a person's property who has failed to pay their taxes. Tax liens can remain on an individual's TransUnion credit report for up to 15 years.
A judgment is a court order requiring a person to pay a debt. Judgments are court records and can remain on a person's credit file for up to 7 years. Court records are public record information.
How to Get Rid of a Public Record
Some procedures can be taken to potentially remove it or have it updated on a credit report:
Verify the Accuracy
Verify that the public record in question is accurate and belongs to you. You can dispute an inaccuracy with the credit reporting organization, like records that belong to someone with a similar name. The major credit reporting agencies are:
- Equifax 800-829-4577
- Experian 800-311-4769
- TransUnion LLC 800-888-4213
Pay the Debt
If the record is associated with a debt, settling the obligation in full may result in its removal from your consumer credit reports.
Wait for the Record to Age
Public records usually remain on a TransUnion credit report for a certain time, such as seven years for a foreclosure or ten years for bankruptcy. After this period, the record should be removed from your credit report by three credit bureaus automatically.
The Fair Credit Reporting Act, 15 U.S.C. 1681 c(a), orders credit reporting organizations not to report bankruptcy on one's credit report 10 years after the case's filing date.
Seek Legal Help
In some cases, it may be possible to have it removed through legal action. You should do this after seeking the advice of a legal professional.
Why Public Records Are Different From Other Credit Reports Entries
Public records differ from other credit report entries in several ways:
- Source of information: Public records are obtained from credit bureaus, while other credit report items like credit card and loan accounts are obtained from financial institutions.
- Negative Impact: Public records like bankruptcies and foreclosures are seen as negative events and can substantially lower the credit score. Other credit report entries can positively and negatively affect a credit score. They depend on factors like payment history and credit utilization.
- Time frame: Typically, public records remain on credit reports for a certain period, such as seven years for a foreclosure or ten years for bankruptcy. Other credit report entries remain on a credit report as long as the account is open and for several years after the account’s closure.
- Dispute process: Disputes involving public records require contacting the credit bureau that gave the information. On the flipside, disputes on other credit report items involve contacting the financial institution that provided the information.
How Does a Public Record Affect a Credit Score?
A public record can significantly impact a person's credit score, as public records are considered negative events. The exact impact on a credit score will depend on the type of public record and the person's overall credit history.
How Long Does Public Record Remain on a Credit Report?
The length of time a public record remains on a credit report depends on the record type and the credit reporting agency. Public records typically remain on a credit report for 7 years for foreclosures and 10 years for bankruptcies. After this period, the record should be removed by credit bureaus automatically from your credit report.
How Can I Dispute a Public Record on My Credit Report?
To dispute a public record on a credit report, a person should first obtain a copy of their credit report from the credit reporting agency and verify the accuracy of the information. If the information is incorrect, the person can dispute it by contacting the government agency that provided the information and providing documentation to support their dispute.
Can I Remove a Public Record From My Credit Report?
It is tough to remove a public record from a credit report completely. However, a person can work to improve their credit score over time by paying bills on time and reducing debt levels.