08/11/2014
HOW PUBLIC RECORDS AFFECT YOUR CREDIT SCORE:
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.
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: 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.
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.
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.
BANKRUPTCIES - 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.
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 Federal tax liens that have been withdrawn are removed immediately, although the consumer will typically need to inform the credit bureaus about the lien withdrawal in order to have it removed.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.
