Public records—which are issued by federal, county, and state governments—are legal documents that anyone can access. Some public reports can appear on your credit report, and as a result, can have a negative effect on your credit score while they’re there (usually seven to 10 years, depending on the item). The following are the examples of public records that could appear on your credit report and can potentially damage your credit score:
Whenever someone declares bankruptcy, a court record of this filing is made and it will also appear on the filer’s credit report. The amount of time it remains on a filer’s credit report will depend on the type of bankruptcy that was filed. A chapter 13 bankruptcy will remain on someone’s credit report for seven years after the filing date, whereas a chapter 7 bankruptcy can remain for 10 years.
Any unpaid tax liens will show up on a credit report for up to 10 years. Even paid tax liens will stay on a credit report, but not as long—usually seven years from the date they’re paid.
If you’ve owed money to a lender for a significant amount of time, that lender may try to get a judgment against you. If they are successful, this will appear on your credit report and can make it very difficult to receive loans or credit. Not only can judgments affect your credit, but they also have other negative implications. A judgment often results in wage garnishment, which means a portion of your wages will be withheld with each paycheck and sent directly to your lender until the debt has been satisfied. If you have unpaid debts, you want to try and take action before it gets to this point.
If you financed a home purchase and fell behind on mortgage payments, you may have had your home foreclosed on. Foreclosures become public records, and these are public records that will appear on credit reports.
How these records can affect credit
Not all negative public records will affect your actual credit score, but they might influence a creditor’s decision, though it depends on what you’re applying for. For example, certain public records might not stand in your way of getting approved for a low-limit credit card. But sometimes, they can stand in your way of getting a job or getting approved for rental housing. Additionally, certain public records (such as bankruptcy), will cause your credit score to drop significantly.
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Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.