Public records usually appear on your credit report as the result of a financial disaster. Evictions, foreclosures, bankruptcies, and judgments are terrible news for your credit.

Each one of these affects your credit reports and scores differently. We’ll explain each public record in detail below.

What Do Public Records Mean on a Credit Report?

Public records include filings in local, state, or federal courts or other community resources that have traditionally appeared on consumer credit reports. 

Equifax, Experian, and TransUnion are the major credit bureaus or credit reporting agencies that collect and report this information.

Public records, such as bankruptcy filings or outstanding tax obligations, were entries that could hinder a consumer’s credit history. Other key credit report entries may include data related to existing credit accounts and delinquent accounts being pursued by collection agencies.

A record that is legally considered public is any data or information that governmental entities must maintain and make reasonably accessible.

In the context of consumer credit, many public records are created after a creditor brings a legal action against an individual and the court enters a formal ruling in favor of the creditor.

In 2017, the National Consumer Assistance Plan led to substantial changes in the laws regarding the types of public records that could be on a consumer’s credit report. This resulted in bankruptcy being the only type of reportable derogatory public record.

In the same year as the purge of most public record information from credit reports, changes to the provisions of the Fair Credit Reporting Act resulted in certain negative information related to delinquent medical debt also being excluded.

What Types of Public Records Become a Part of Your Credit Record?

According to Experian, bankruptcy is the only remaining type of public record entry that a major credit reporting agency will include in a consumer’s credit file. Up until the 2017 changes, a consumer reporting agency often included entries such as tax liens and even, parking tickets.

Depending on the category (chapter) of the bankruptcy filing, these records or entries remain on consumer credit reports for 7 to 10 years. Other personal information that is typically visible includes any aliases or current or past addresses, phone numbers, and employers.

Many types of public records are still easily obtainable elsewhere today, particularly with local, state, or federal agencies facilitating internet accessibility. However, the process of accessing public records might be cumbersome and subject to fees.

At the federal level, the Freedom of Information Act (FOIA) guides the laws regarding public information for the protection of personal privacy, national security, etc. Meanwhile, most states have created their own versions, such as Colorado’s Open Records Act (CORA).

Common types of public records include information regarding immigration and nationalization, transactions involving real estate, professional licensing, and more.

Certain types of financial and personal information will never be included on a credit reporting agency including information regarding physical or mental health, marital status, level of education, or records related to criminal convictions.

How Do Public Records Affect Your Credit Score?

According to Credit Karma, public records are one of six sections on your credit reporting company file along with personal data, employer information, credit accounts, credit inquiries, and consumer statements such as requests for removing inaccurate information.

Any adverse public records are part of the overall credit file that may factor into whether or not consumers have a good credit score.

Eviction

If a tenant fails to pay their rent or otherwise breaches the terms of a rental agreement, landlords may pursue eviction, which is a civil action filed in a local or state court seeking to legally oust the occupant from the property.

According to Equifax, consumers will not find entries specifically citing an eviction within their history compiled by the credit reporting agencies following the 2017 changes currently enforced by the Consumer Financial Protection Bureau and Federal Trade Commission.

However, if the tenant’s unpaid debt is transferred to a collection agency, it may appear on credit reports as an adverse collection account within the payment history when reported by credit reporting agencies — which can impact your credit score.

Keep in mind that many landlords will conduct a background inquiry using specialized tenant screening systems that will likely reveal evidence of a prior eviction and other court records.

Collection Accounts

If you have a credit account that is delinquent the file may be sold to a collection agency that buys debts and pursues these balances. These collection accounts might appear on one or more of your TransUnion, Experian, or Equifax credit reports and hinder your credit score.

If a consumer pays the collection account, the third-party agency should update the status of the credit bureau entry to reflect that the debtor has satisfied the obligation; however, the entry will usually remain on the report for seven years and likely will continue hindering your credit score.

Tax Liens and Judgments

In this context, a tax lien is a legal claim made by the government against someone for failing to satisfy a tax debt.  Liens may be placed on real estate, businesses, vehicles, and other assets and many tax liens cannot be discharged through bankruptcy.

The 2017 consumer protection laws also excluded entries indicating a tax lien from appearing on credit reports, meaning they will not impact your credit score.

A civil judgment is a court order (decision) to finalize a lawsuit filed against a borrower that allows the creditor to proceed with wage garnishment or other enhanced efforts to collect a debt.  Judgments are also one type of public record that are excluded from credit reports.

Bankruptcy

Debtors who are unable to satisfy their obligations may seek relief by filing a Chapter 7 or Chapter 13 bankruptcy in a federal court. A Chapter 7 bankruptcy is generally applicable to consumers who are totally insolvent and may be described as liquidation of all assets.

A Chapter 13 bankruptcy is appropriate for those who generally have some current source of income, but are overwhelmed with debt. Here, the debtor partially repays their debts in installments over a period of three to five years.

Chapter 7 bankruptcies generally remain on credit reports for 10 years and Chapter 13 bankruptcies are visible for seven years. Regardless, bankruptcy has a devastating effect on a consumer’s credit score.

Foreclosure

A foreclosure occurs when a borrower fails to make their home mortgage payments and the lender enters the process of taking possession of the property to compensate for their losses.

Evidence of foreclosure generally remains on a consumer’s credit report for seven years and has a very adverse impact on credit scores.

How Long Do Public Records Stay on Your Credit Report?

The following chart outlines the amount of time that public records and other entries remain on credit reports.

Durations of Accounts and Entries on Credit Reports

Types of Account or Entry	Duration
Late Payments	7 years
Collection Accounts (Paid or Outstanding)	7 years
Bankruptcy Chapter 7	10 years
Bankruptcy Chapter 13	7 years
Hard Credit Inquiries	2 years
Closed Credit Accounts (In Good Standing)	10 years
Existing Credit Accounts (Open & In Good Standing)	Indefinite

Source: TransUnion

Keep in mind that late payments are typically reported to the credit bureau after 30 days have elapsed, which begins the seven-year period. Also, the seven-year period for accounts sent to a collection agency begins on the date the original delinquency was reported.

Often, consumers that endure very adverse entries, such as a Chapter 7 bankruptcy, can rebuild their credit to an average score or better in only a couple of years by beginning efforts to restore their credit history, which can be obtaining a secured credit card.

Secured cards typically require a security deposit that is equivalent to the credit limit. Using the secured card responsibly may allow you to later qualify for a traditional unsecured card from that lender.

Another option is obtaining a credit builder loan from CreditStrong, a division of a Texas-based community bank.

CreditStrong’s installment loan program differs from a standard loan where the borrower receives the loan funds initially. Here, the funds are deposited and secured in an FDIC-insured savings account.

Next, the borrower makes affordable, fixed monthly payments over the term of the loan. Throughout the loan term, CreditStrong regularly reports the payment history to the three major credit bureaus, which should improve your credit score.

After making all of the loan payments, the funds in the savings account are then released to you.

Can a Public Record Be Removed From Credit Reports?

Consumers may obtain a free credit report each year from the credit bureaus, which may allow for identifying any errors or omissions that might be hindering their score. For example, TransUnion has an easy-to-use website process for disputing incorrect public records.

You may dispute a credit report entry online, via U.S. Mail, or over the phone. Be sure to describe the concerns in detail and include any relevant documentation.

TransUnion will complete the investigation process in roughly 30 days and make corrections accordingly. Keep in mind that only confirmed and validated credit report entries will be removed.  

Recent federal changes limiting the types of public records that may appear on credit reports can benefit consumers.

Responsible consumers should strive to maintain good credit by always making timely payments, limiting unnecessary credit card spending, and checking their credit reports annually.

Those who have already incurred adverse credit-related concerns are encouraged to take steps toward improving their credit by using tools such as credit builder loans and others with proven results. 

CreditStrong helps improve your credit and can positively impact the factors that determine 90% of your FICO score.

Start Building credit today