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When it comes to creditworthiness, consumers are rightfully confused. Does a car loan constitute a public record? Who can access such information? And how do public records impact your credit score? Fortunately, we’ve researched the topic in-depth and can help set you straight on car loan concerns on your credit report.
Car loans are technically not part of your public record. Typically, your loan information is only available to you and the lender, plus the credit reporting agencies that follow such transactions. However, a car loan could become a public record if the loan falls under a bankruptcy case or court judgment.
Yes, that’s a lot to take in—but we’ll cover the details here, including what records are public, how they can become public, and how to remove them from your record when applicable.
What is Considered Public Record on a Credit Report?
On your credit report, public records are those which involve court reporting and judgments. They’re called public records because the information is available to the public—via an online portal or physically at the courthouse—and anyone can request the details.
But when it comes to credit reports, not all the information that is public record is permitted to be included.
That’s because, as of March 2018, the National Consumer Assistance Plan was fully implemented. The agreement involves the three major consumer credit reporting companies (Equifax, Experian, and TransUnion) agreeing to leave the details of civil judgments and most tax liens off users’ credit reports.
In the past, all lawsuits, liens, and foreclosures would show up on your credit. Now, those items don’t necessarily transmit directly to your report—though they’re still available in the court docket for anyone’s perusal.
Car Loans as Part of a Judgment
Typically, a car loan isn’t a public record. It shows up on your credit report, which indicates whether you pay on time and if you’ve paid late, by what margin (30/60/90 days). But your coworker or neighbor can’t view those records by putting in a request at the courthouse or searching online.
However, anyone who has legal access to your credit report can view your loan status. This includes any other lenders with whom you apply for credit, a mortgage, or any other financial package—including a bank account. Even car insurance companies can check your credit to decide whether you’re a risk.
However, when it comes to your car loan, the agreement between you and the lender is a legally binding document. Therefore, if you don’t pay, the lender could file a judgment against you. Court judgments are different than car loans—and much more severe.
Car Loans as Part of Bankruptcy Filings
A car loan can also be involved in a bankruptcy filing, which then makes the car loan part of the public record. When you file bankruptcy, those records show up in the public record part of your credit report.
Lenders have a right to know that you have not paid a past debt and the terms of your settlement. This all factors into how big of a credit risk you are to lenders. Whichever type of bankruptcy you file, your vehicle loan will factor into the judicial decision.
Are Judgments Public Record?
Technically, judgments are a public record because anyone can access the court records for such events. A judgment happens when a court decides on your involvement (and applicable amounts owed) in a lawsuit. However, judgment creditors can no longer count on such debts showing up on the individual’s credit report.
What Happens if a Judgement is Not Paid?
If you don’t pay on a judgment against you, it can go to collections. In most cases, the person or agency you owe will act immediately to collect the balance. But as soon as a judgment is filed, it begins to accrue interest, so paying it as promptly is ideal.
With nonpayment, the judgment creditor can take action up to and including garnishing your wages. However, the specifics of the judgment will not show up on your credit report any longer, due to the National Consumer Assistance Plan guidelines.
In short, judgments are still part of your public record, but that public record doesn’t necessarily transmit to your credit report.
What Types of Public Record Information May Be in a Credit Report?
A few types of public record information can show up on a credit report: bankruptcy filings, foreclosures, tax liens, and lawsuits.
A Bankruptcy on Credit Reports
A credit report reflects only public record information covering bankruptcy. Both types of bankruptcy (Chapter 7 and Chapter 13) can remain on your credit report for up to ten years, potentially affecting your creditworthiness.
Chapter 7, bankruptcy is the most common and involves selling your possessions to settle with creditors. It stays on your credit report for up to ten years. Chapter 13 includes you keeping your property but paying (whether wholly or partially) the debt you owe. This type typically drops off your credit report in seven years.
Foreclosures on Credit Reports
If you are unable to pay for—or stop paying on—a mortgage, the bank can foreclose on your loan. Foreclosure means you failed to deliver on the agreement you made with the lender, and it is a public record in many states.
Tax Liens on Credit Reports
If you fail to pay state or federal taxes, the information could stay on your credit report for over a decade. However, the new National Consumer Assistance Plan has successfully removed many tax liens because they were not appropriately reported to credit agencies.
Lawsuits on Credit Reports
Lawsuits can also show up on credit reports as public records because they are public knowledge via the court system. However, credit reports only indicate the judgment of the case (whether you won or lost) is the judgment includes specific identifying information, such as your name, address, and social security number or birthdate.
How to Remove Public Records from Credit Report
In most cases, you can’t remove public records from your credit report unless you settle the debt involved. Plus, the new National Consumer Assistance Plan requires debt collectors to “regularly update the status of unpaid debts” and remove older debt they’re no longer pursuing.
For many consumers, as soon as they finish paying off a debt, it will drop off their credit report. This is true whether the debt is a tax lien with the U.S. government, a bankruptcy filing with repayment terms, or an overdue judgment for another type of court case.
However, if you believe that an error has been made on your credit report, you can dispute the information directly through any one of the credit reporting agencies:
- Information on disputing errors via Experian
- Dispute information on your Equifax credit report
- Dispute a mistake on a TransUnion credit report
Unfortunately, there’s no legitimate way to remove public record information from your credit report unless you repay the debt—and that includes car loans that go into default. But the good news is, if you keep your car payments current, you can avoid adding details of your loan to the public record.