Your credit report is an evolving compilation of your financial history. The report contains personal information, including current address and Social Security Number, and credit accounts, like credit cards and car loans. The report also contains public records, so it's beneficial to understand what a public record is and its potential impact on your finances.
A public record is a legal document that's issued by a state or federal court and is accessible to the public. An adverse public record will appear on your credit report. Such documents include foreclosures, bankruptcy, judgments and tax liens. Some public records, such as a divorce decrees, do not appear on your credit report. Adverse public records are reported to the credit bureau by the state or federal court that issued the document.
A credit report contains a section that lists all public records that have been filed against an individual. According to myFico, your FICO score ranges from 300 to 850, and the presence of an adverse public record on your report will negatively impact your credit score. How much your score falls depends upon the type of public record and the other information located within your report. For example, according to Bankrate, a bankruptcy can drop a FICO score by as much as 240 points.
The Fair Credit Reporting Act governs credit reports. The law limits the amount of time an adverse public record can remain on a credit report. Paid tax liens remain for seven years. Unpaid tax liens remain for up to ten years in California but indefinitely in other states. Chapter 7 and 11 bankruptcy can remain for ten years. Non-discharged or dismissed Chapter 12 and 13 bankruptcy remain for ten years. Foreclosures and judgments remain for up to seven years. In New York state, however, paid judgments can only remain on the report for five years.
For the best credit score, it's important to ensure that your credit report is as accurate as possible. The Fair Credit Reporting Act gives you the right to dispute the appearance of errors on your report. If you have a public record that is outdated or otherwise inaccurate, you can file a dispute with the credit bureau. The bureau then has up to 30 days to investigate the dispute and either remove or correct the error. You can file a dispute by phone, mail, or online at the bureau's website.