HOW DO PUBLIC RECORDS AND JUDGMENTS AFFECT MY CREDIT SCORE?


 

Some public records can have an adverse affect on your credit score, so you need to carefully consider whether it is worth going to small claims court versus reaching a settlement with the other party outside of court.

PUBLIC RECORDS AND YOUR CREDIT SCORE

Public records are legal documents created and maintained by federal and local governments, which are usually accessible to the public. Some public records, such as divorces, are not included in your credit score, but adverse public records, which include bankruptcies, judgments, and tax liens, are included in your credit score. A credit score can be affected by the presence of an adverse public record, whether or not it’s paid.

 

DEALING WITH A JUDGMENT ON YOUR CREDIT REPORT

Judgments will almost always have a negative effect on your credit scores. Before letting a bill or credit obligation get to the courthouse, try to see if there is an alternative. Reach out to the individual or company to whom you owe money and see if an arrangement can be worked out. If you are dealing with a collection agency or other similar company, they may be willing to agree on a settlement that is equitable to both parties. It is more efficient for them to work with you directly than through the courts.