If you have ever taken a look at your full credit report, you will notice that it’s broken into four main sections, one on personal Identification, one on your credit accounts, one on your credit inquiries and one about your public records and accounts in collections. While the first three sections have a ton of information online, the section on public records isn’t as known.
To learn more about public records and how they affect your credit, keep reading.
What Is A Public Record?
A public record is any municipal, provincial, or federal documentation that is accessible to the general public. Broadly speaking, public records refer to all legal and government matters which are too vast to discuss entirely in this article. In relation to credit reports, you can expect to see the following types of public records:
Bankruptcy is a legal procedure in Canada that absolves you of most, if not all your debt. However, you may lose your assets in the process. Bankruptcy is filed through a Licensed Insolvency Trustee and is considered a last resort. When you file for bankruptcy, the credit bureaus will be notified and it will become part of the public records. These records will be accessible to anyone who wishes to see it.
A consumer proposal is another legal process that can absolve you of your debts, however, your debt should be no more than $250,000 and you must have the financial capability to repay a percentage of your debts. Consumer proposals generally last between 2 – 5 years, with 5 years being the maximum time you must repay your debt. Like bankruptcy, this program is filed through a Licensed Insolvency Trustee and will be reported to the credit bureaus. This information will also become part of the public records and will be accessible to anyone who requests it.
Debt Management Programs
A Debt Management Program (DMP) is a debt relief solution for those who need a bit of assistance. With a DMP, you consolidate your debts into one affordable payment, however, you’ll still be paying all of your debt.
Unlike a consumer proposal, your debt isn’t reduced, rather your interest charges may stop and you may be given more time to pay off your debt. DMPs will show up in the public records of your credit report.
A lien is a term used to define an asset that is used as security for a loan, like a personal loan or a mortgage. When these go unpaid, the lenders have the right to seize the asset to recoup any losses.
Tax liens, judgment liens, and real estate liens are some of the types of liens that can show up on your credit report under the public records section.
Do note, that non-financial public records will not be shown on your credit report. For example, a divorce is a public record, but it will not show on your credit report.
How Long Does A Public Record Remain On Your Credit Report?
Public records can remain on your credit report for three to ten years. The amount of time depends on what the public record is exactly. While public records can stay on your credit report for a long time, the impact it generally has fades with time. Moreover, it will eventually be removed from your credit report.
|Liens||Note: at TransUnion, lien information will stay on your report for 5 years.||6 (10 in PEI)||5|
|Bankruptcy||Note: TransUnion keeps bankruptcy information for 7 years in Ontario, Quebec, New Brunswick, Newfoundland and Labrador, and P.E.I.||6||6-10|
|Multiple bankruptcies||If you file for more than one bankruptcy.||14||14|
|Consumer proposal||Note: Equifax will remove the remark 3 years after you pay all debts in the consumer proposal. TransUnion will remove it 3 years after you pay your debts or 6 years after you signed the proposal, whichever is sooner.||3||3 or 6|
|Legal judgments||Note: TransUnion keeps legal judgment information for 7 years in Ontario, Quebec, New Brunswick and Newfoundland and Labrador and 10 years in P.E.I.||6||6-10|
|Debt management program (DMP)||Note: At Equifax, if a debt is not repaid, the DMP remains on the credit report for 6 years following the date filed.|
Note: TransUnion will keep the DMP on record for 2 years following the date paid, or if sooner, 6 years from when the account first became delinquent.
How To Improve Your Credit If You Have Negative Remarks In Your Public Records?
If you continue to upkeep other aspects of your credit report and personal finances the damage caused by items in your public record may not be as severe or long. To help boost your credit, here are a few things you can do:
- Keep Up With Your Payments – Your payment history usually account for around 35% of your credit score calculation. This makes it the most significant factor in determining your credit score. As such, making your payments on-time and in-full are crucial.
- Keep Your Debt-to-Credit Utilization Low – Your debt-to-credit ratio refers to the amount of revolving credit you use versus how much you have available. This factor generally accounts for about 30% of your credit scores. Given that, it’s in your best interest to utilize your credit responsibly. Most recommend using no more than 30% of your available credit for the most positive impact on your credit.
- Use A Secured Credit Card – If your public record is making it impossible for you to qualify for a credit card or loan, a secure credit card can help. They’re designed to help those with poor credit build credit. It works just like a credit card, however, it generally doesn’t have any points or rewards system. Moreover, you have to provide a security deposit which aslo acts as your credit limit.
- Avoid Applying For Too Many Credit Products – While it may be tempting to apply to multiple credit products in hopes of being approved for one, this can do more damage than good. When you apply for a credit product, the lender will pull your credit report which will result in a hard inquiry. Multiple hard inquires can negatively impact your credit scores and could signal to lenders that you’re having financial difficulties.
Public Record FAQs
Do all public records show up on your credit report?
Why is there a public record on my credit report?
Can I have a public record removed from my credit report?
If you do have a public record on your credit report, it can work against you and your credit, but it’s not the be-all-end-all. The public record will impact your credit less over time and will eventually fall off altogether. If you don’t have a public record on your credit report, try to keep it that way by managing your finances responsibly.