fbpx
  • Consumers Encouraged to Understand How Long do Public Records Stay on their Credit

  • Consumers Encouraged to Understand How Long do Public Records Stay on their Credit

    March 7, 2018 | Blog
  • Consumers in the United States should know the duration that public records remain on a person’s credit report. Public records refer to personal information including bankruptcy, judgment, and tax lien that turn out to be public knowledge. The public record’s category establishes how long said information will be on people’s reports.

    According to credit repair companies, bankruptcies (Chapters 12, 11, and 7) will be on the consumer’s credit history for no less than 10 years from the filing date. However, a complete Chapter 13 insolvency is generally removed seven years after it is filed. The tax lien lingers on the individual credit report also for seven years from the date of reporting if paid or indefinitely if unpaid.

    The Internal Revenue Service (IRS) has initiated a program known as “Fresh Start.” The person can ask for a paid (satisfied) tax lien so it can be taken away from his or her credit history.

    Meanwhile, a paid judgment will stay on the report for seven years from the time it was filed. An unpaid judgment will remain on reports for seven years or during the prevailing ruling of limitations whichever will be longer.

    Public records can lead to bad credit which means scores will decline if public records are filed. Effects can be quite serious. An effective method of monitoring these reports constantly within the year and prevent flawed information is use free report cards like the one provided by Credit.com.

    These reports provide essential insights in the person’s financial history. It affects the financial future of consumers. Bad credit can obstruct approval of mortgages as well as credit card interest rates. Adverse information is detrimental and affects credit scores preventing the person from incurring good credit.

    On the other hand, hard inquiries come out each time facilities access the person’s report once he or she applied for a line of credit. Some examples include home mortgage, car loan, credit card, or student loan. Inquiries usually remain for 24 months but impact scores only for the first year.

    New credits (credit accounts and inquiries) comprise only 10% of the individual’s FICO rating. One inquiry reduces the credit score by three up to five points. Adverse account information will stay on consumers’ reports also for seven years after it is first registered. Closure of the account referred to will mean it will be removed from the person’s report after seven years. However, the rest of account details are left in the report.

    On the other hand, any positive information will be kept in the report for an indefinite period unless the account is terminated. These details stay on the report for another 10 years after closing. Positive information translates to good credit.

    People who fail to pay debts or credit card bills on time can lead to collection accounts which mean the liability is endorsed to the collection department or an independent agency. These accounts stay open for seven years and 180 more days after the delinquency was reported.