You've probably heard the term public record before. It's a document, or record of information, recorded by a court or governmental agency, that's made available to the public. Some public records, such as tax liens, may appear on your credit report while others, like a marriage license, do not. Certain public records are considered derogatory, and might have a negative impact on your credit.
There are various types of public records. The term "public record" includes court records, public registers maintained by the government and land deeds. These records, and the information contained within them, can be accessed by members of the public either at the location where the records are housed or in some cases, online. Property tax assessments, which include the name of the property owner and the assessed value of the property, are examples of public records.
Derogatory Public Record
A derogatory public record is a public record that appears on your credit report. These often result from an unpaid bill or financial obligation. Derogatory public records are negative items to have on a report. The appearance of a derogatory public record on your report may cause lenders to deny you credit. Judgments, bankruptcy, foreclosures and tax liens are all examples of derogatory public records. Keep in mind that a non-financial public record, such as voter registration, does not appear on a credit report and isn't considered a derogatory public record.
A derogatory public record can hang around for a very long time. Under the Fair Credit Reporting Act, most public records remain on a credit report for up to seven years, with certain exceptions. Unpaid tax liens remain on a report indefinitely. Chapters 7, 11 and non-discharged or dismissed Chapters 12 and 13 bankruptcy remain on a report for 10 years from the date filed. Two states have additional exceptions. In New York, satisfied judgments remain for five years from the date filed. In California, paid or released tax liens stay on a report for seven years from the date released, or 10 years from the date filed. Unpaid or unreleased tax liens remain on the report for 10 years from the file date.
A FICO credit score begins at 300 on the low end and rises as high as 850. Of course, the higher the score, the better your credit. According to FICO, a derogatory public record will usually lower your FICO credit score. How much it lowers your score depends upon the information in your credit report. For example, a foreclosure can drop a credit score between 85 and 160 points, according to FICO. That's significant, but a bankruptcy can ding your score by 130 to 240 points.
- BusinessDictionary.com: Public Document
- BusinessDictionary.com: Derogatory Information
- PrivacyRights.org: From Cradle to Grave: Government Records and Your Privacy
- Equifax.com: Length of credit History
- AutoLoanDaily.com: FICO Reveals How Mistakes Can Drop Your Credit Score
- myFICO.com: How Do Public Records and Judgments Affect My FICO Score