What is a Public Record on Your Credit Report?
A Public Record on your credit report can ruin your credit score and they aren’t easy to bounce back from. Public Records are legal items like Bankruptcies, Civil judgments, and unpaid Tax Liens are the three types of public record that will appear on your credit report.
Bankruptcy is a legal condition of a person or company that cannot pay off their debts. You can declare bankruptcy in a court proceeding, the judge will look at your assets, income, liability, etc., and decide to clear you of all, some, or none of your debts. Since the purpose of a credit report is to show your risk level, having a bankruptcy on your report is a harmful item for your finances and will warn all future possible creditors of that history. There are two types of bankruptcies, Chapter 7 and Chapter 13. A Chapter 7 Bankruptcy is when you pay part of your debt and excuse the rest, these stay on your report for a total of 7 years. A Chapter 13 bankruptcy is when you are unable to pay and are completely discharged from your debts and will stay on your report for ten years.
A civil judgment is a general term for this type of negative item. A civil judgment can be any ruling against you in court that was non-criminal. An example of a civil judgment is a civil lawsuit. Not every civil judgment will end up on your credit report, only if it’s reported onto it. The bureaus will decide to put it on your report if they feel like it pertains. Credit bureaus will also decide how it weighs down on your credit score.
Unpaid Tax Liens
When you dodge paying your taxes it puts an item called a tax lien on your credit report. A Lien is the government’s insurance, they take an asset of yours to pay the taxes you failed to pay. Property is an example of the assets they will take. As long as you refuse to pay those taxes or have no assets to take the Tax Lien remain on your report, these are negative marks on your report that hurt your credit score. How much they affect your score and how long they last vary depending on the type and amount of taxes you owe.
What to do about a Public Record on your Credit Report
Bankruptcies, Civil Judgments, and Unpaid Tax Liens are three legal items that you should work to avoid at all costs. If you already have a public record on your credit report the most important thing is taking action as soon as possible to minimize the damage to your finances. For help disputing items talk to a credit specialist at Credit Innovation Group!