Public records include any record that is on file with a court at the local, county, state or federal level. The only public records that will normally be included in your credit record are those that are related to debt.
The only public records that currently appear on credit reports are those related to bankruptcy. Tax liens and civil judgments used to be reported, but credit reporting companies have voluntarily stopped reporting them under the terms of a court settlement.
This decision was not required by the Fair Credit Reporting Act and credit reporting companies may resume reporting tax liens and civil judgments in the future as long as they comply with conditions designed to assure accuracy.
What Public Records Can Be Included on Credit Reports?
The Fair Credit Reporting Act allows credit reporting companies to report public records that are related to debts. In the past, credit reporting companies have usually included three categories of public records.
- Tax Liens
- Civil Judgments Related to Debts
Civil judgments and tax liens are no longer reported on credit reports. Bankruptcies are the only type of public record currently being reported by the major credit reporting companies.
Why Were Tax Liens and Civil Judgments Removed from Credit Reports?
In 2015 the three major credit reporting companies entered into a settlement with 31 states. The settlement required the companies to adopt tighter standards for some types of credit reporting.
Most information on credit reports is voluntarily submitted by creditors. Public records were sourced through searches conducted through various electronic databases. Some of this information was provided by third-party vendors. The settlement was designed to prevent inaccuracies in this system.
The credit reporting companies initially deleted records of tax liens and civil judgments that did not include a person’s name, address, Social Security Number or Date of Birth. They subsequently decided to eliminate all civil judgments and tax liens from credit reports. As of April 2018, all civil judgments and bankruptcies were removed from credit reports.
It is important to note that the Fair Credit Reporting Act does not prohibit the reporting of tax liens or civil judgments. Credit reporting companies may resume reporting them at any time, subject to safeguards to assure accuracy.
Can Civil Judgments and Tax Liens Still Affect My Ability to Get Credit?
Civil judgments and tax liens no longer appear in the public records section of your credit report, but that doesn’t mean you’re off the hook. Creditors are deeply concerned with these events, especially those making larger loans: people with tax liens or civil judgments are more likely to default on loans.
Many mortgage lenders and some other lenders will perform public records searches themselves or hire other companies to do it for them. These searches do not involve the credit reporting companies and are not affected by the settlement. Lenders still want to know if you have civil judgments or tax liens and they can still find out.
If you default on a loan and your collateral is foreclosed or repossessed, the civil judgment enforcing foreclosure or repossession will not be reported in the public records section of your credit report. The foreclosure or repossession can still be reported by the creditor and included in the “status of accounts” section of your credit report.
If a creditor or a collection agency sues you over an unpaid debt and wins, the judgment will not be reported in the public records section of your credit report. The delinquency that led up to the lawsuit will still be reported and will still affect your credit.
Do not assume that the exclusion of civil judgments or tax liens from your credit report gives you a free pass. The credit reporting companies could resume reporting these events at any time. Even if they don’t, lenders can still gain access to these records and they can still affect your ability to get credit.
How Long Will Public Records Affect My Ability to Get Credit?
The Fair Credit Reporting Act (FCRA) does not allow the reporting of negative records that are more than seven years old–with some exceptions. Some forms of bankruptcy may be reported for up to ten years.
This rule, known as the seven-year rule, applies to everybody who reports credit information, not just the major credit reporting companies. This includes tenant screening companies, third party public records search firms, and public record databases.
Negative public records that are over seven years old (or ten years for some forms of bankruptcy) cannot legally be used as a basis for lending decisions. Once seven years have passed, the information can no longer be reported to or used by a lender.
The seven-year rule does not eliminate legal liability for a debt. You can still be sued over a debt that is over seven years old, subject to your state’s statute of limitations.
Can Civil Judgments be Removed from My Records?
If a civil judgment or tax lien is still reported on your credit report, you can dispute the record with the credit reporting company, and have it removed. Bankruptcy information cannot be removed from your credit report unless you can prove that it’s inaccurate.
Tax liens can be removed from public records by settling your tax arrears. As long as tax arrears are outstanding, they can be located by lenders even if they are not on your credit report.
Civil judgments may be removed from public records if you can prove that the judgment involved faulty information or improper procedure. You will have to consult an attorney and file an action with the court that issued the judgment.
Beware of any person or company who claims to be able to remove accurate, legitimate information from your credit report or any public record, especially if they want to be paid upfront. You may be looking at a credit repair scam.
Bankruptcies, civil judgments, and tax liens can legally appear in your credit report. Civil judgments and tax liens are not currently included in credit reports. This policy may change at any time. Potential creditors can still gain access to public records of tax liens and civil judgments and use them in lending decisions.
Civil judgments and tax liens may no longer be in your credit report, but they can still be major impediments to getting new credit. Avoid them if you can.