If you don’t pay your bills on time, then you will most likely not be surprised when your credit score goes down. You will probably have the same reaction if you are turned down for a loan when all of your credit cards are maxed out. However, you may be surprised to learn what else can affect your score. Many people assume that only financial information, such as paying your bills on time, debt-to-credit ratio and foreclosures affect their credit score. While that information makes up a large percentage of your credit score, certain information in public records can also be used against you by creditors and even lower your credit score. According to MyFico.com, “Public records are legal documents created and maintained by Federal and local governments, which are usually accessible to the public.”

How do the credit bureaus get this information?

Many people incorrectly assume that the courts report public record information to the credit bureaus. “The credit bureaus actually go out and proactively retrieve the public record data in the credit file database. Because the data is public anyone, including me and you, can go down to the courthouse and grab it,” says John Ulzheimer, president of consumer education for SmartCredit.com in his article “What Happens If I Didn’t Pay My Taxes. “And, when you challenge public record information on your credit report the credit bureaus aren’t calling the courthouse and speaking to the clerk. They’re having to go back to the courthouse, electronically or in person, to verify the validity of your dispute claim.”

Do all public records hurt my credit?

No. Creditors are only interested in public records that are financial in nature. For example, if you get a divorce, while the information is public record and may be accessed by potential creditors, it will not negatively affect either your credit score or creditors’ willingness to lend you money. But other types of public records can have potentially serious ramifications on your ability to get credit. “Adverse public records include bankruptcies, garnishments, foreclosures, tax liens and they can severely hurt your FICO score,” says MyFico.com.

But once I pay a judgment it is removed from my credit report, correct?

Surprisingly, the answer is no. If you are taken to court for nonpayment by a small business or other creditor and the judge rules against you, then the mere judgement against you will decrease your score even after you pay it. However, if you are taken to court and the decision is in your favor, then it will most likely not have a negative impact on your score. Note that some tax liens will be not affect your score as soon as they are taken care of.

How long will the adverse public record affect my credit?

The length of time the record will be a problem for you depends on the type of record. According to Ulzheimer, the length of time bankruptcies are reported depend on the type of filing while other types of records stay on your credit for seven years, including judgments, foreclosures, and released tax liens. He says that paid and withdrawn tax liens are removed immediately while unpaid liens are reported until you have paid the tax.

What can I do to minimize the impact of public records?

If the public record information is an error, then you need to proactively work to get it removed. However, if the information is correct, then there is not a lot you can do once the judgment is rendered. The best strategy is to prevent adverse judgments against you whenever possible. If you are presented with an option to settle with a creditor before they take you to court, consider the damage to your credit score and ability to get credit as part of your decision. Additionally, before your wages are garnished or a lien placed on your home, make sure that you think about the credit score ramifications to these acts and make as much effort as possible to resolve the issue before the courts are involved.

By being aware of the impact that public records can have your credit and taking steps to prevent such actions, you can keep your credit score high and be able to take advantage of the financial opportunities that come your way.