Can the public record affect your credit report?

Your credit report is a record of your financial history. Banks and other institutions use it to judge how creditworthy you are, which in turn affects the interest rates you’re offered on loans, what credit cards you can get, and more. Your credit score also affects your ability to rent an apartment and get a cell phone plan. Your credit card and loan payment history is included in your credit report, but what else does the report show?

Credit Reports And Public Records

Your credit report changes from month to month depending on the reports, good and bad, made by your creditors and other reporting entities to the three national credit reporting agencies: Experian, EquiFax, and TransUnion. They’ll report whether you made payments on time and whether you missed payments.

That’s not the only information in your credit report – your report also contains information obtained from public records, such as civil judgments, federal and state tax liens, and bankruptcies. Essentially, these public records reflect any event connected with an unpaid debt that became part of a document issued by a state or federal court of public record. These records are reported to the credit reporting agencies by the state or federal court that issued them. Additionally, it is permissible to report failure to pay child and/or spousal support that has been verified by federal, state, or local governmental agency. Divorce decrees are not included in your consumer credit report, although they may appear in other types of background reports as a matter of public record.

Do Public Records Hurt My Credit Score?

Public records can adversely affect your credit just as a report of a delinquent account would. The good news is that pursuant to the Fair Credit Reporting Act (FCRA) 15 U.S.C. §1681c, there are specific time limits for how long a public record can remain on your credit report. Under the FCRA, for example, a bankruptcy can only remain on your report for 10 years from the date it was filed. However, most credit reporting agencies delete a Chapter 13 bankruptcy 7 years after the date it was filed. If your credit report shows public record of a tax lien, first determine if it is state or federal as different laws may apply. In California, the public records included in credit reports are governed by Cal. Civil Code §1785.13 which provides the pertinent time limits on certain public records. For example:

1. Bankruptcies shall not be included more than 10 years after the date of the order for relief.
2. Lawsuits and judgments shall not be included more than 7 years from the date of entry or renewal or until the governing statute of limitations has expired, whichever is longer. Unlawful detainer actions shall not be included unless the lessor prevailed over the tenant (but not through settlement agreement).
3. Paid tax liens shall not be included more than 7 years from the date of payment. However, pursuant to federal law, unpaid tax liens shall not be included more than 10 years from the date of filing, unless the lien is renewed. Pursuant to Cal. Gov. Code §7172, a state tax lien shall not be included for more than 10 years of the filing of the notice or 10 years from the date of the last extension. The lien may be extended by recording in the office of the county recorder or by filing with the Secretary of State.
4. In California, records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime shall not be included in the credit report more than 7 years from the date of disposition, release, or parole. Moreover, in accordance with Cal. Civil Code §1785.13(a)(6), “these items of information shall no longer be reported if at any time it is learned that in the case of a conviction a full pardon has been granted, or in the case of an arrest, indictment, information, or misdemeanor complaint a conviction did not result.”

Reading And Correcting Your Credit Report

How do you find what portion of your credit report is “public record?” When you pull view credit report, you can locate the public record items under the section entitled “Public Information.” There, you will see a listing of the type of public information and the date on which it occurred.

What if your credit report includes public record information that should already have been removed? This is why it is so important to take a close look at your credit report from time to time. You are not required to pay for your credit report; you can request it for free from each of the three reporting agencies. Remember to get all three – they may have different information.

Once you have your reports, examine the date that each piece of information was entered. For example, does your report show a bankruptcy that you filed in 2001? If you see something that you believe should have been deleted, you can file a dispute for free with that credit bureau based upon that credit report. Once you have filed your dispute, the credit bureau has 30 days to investigate and make a determination. If you find a different mistake or get new information about the original mistake, this is called “supplementing” your original dispute and will extend the review time for the credit bureau by 15 days. While your dispute is pending, the disputed item will not appear adversely in your credit report. Be as honest as possible during the dispute; lying to the credit bureau to remove an adverse piece of information can potentially be construed as a criminal act.

Once the credit bureau makes a determination, it will send you a summary of its findings. If it determines that a public record should not be included in your report, that record will be deleted. If the bureau has found the public record to be verifiable and decided it should remain, you have the option of re-disputing the matter. If you haven’t found any additional information to support your argument, it’s unlikely that the bureau will change its original decision.

A deleted item could reappear at a later date on your credit report if resubmitted by a reporting entity. If this happens, the credit bureau must notify you and you can dispute the item again. To prevent this from happening, you can dispute the information with the entity that originally reported it, such as the local court.

Protect Your Credit

Your credit score affects everything from your ability to rent a car to your ability to get a cell phone. Check it once a year to make sure that your credit score isn’t suffering from incorrect or outdated information. If your credit report contains the wrong information, dispute it as soon as possible and follow up regularly with the credit bureaus until the necessary changes have been made. Keep a record of all your contact with the bureaus in case the same mistake shows up again; that will expedite the process of having it removed.

Image Credit and License