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Consumer Guide to Credit Reports – Part 6

Now that you’re becoming an expert at reviewing your credit report, here is some key information about public records section and the difference between hard and soft inquiries.

Public Records

The public records section chronicles major financial events such as judgments, foreclosures, lawsuits, wage garnishments, state and federal tax liens, past-due child support, and bankruptcy. Anything reflected in the Public Records section of a credit report is damaging; the information will remain for at least seven years and up to 10 years for Bankruptcy. It goes without saying that you should try to make timely payments on debts listed under Public Records and pay them off as soon as possible. We typically recommend our clients to pursue an aggressive plan of payment on debts listed under Public Records as it speeds up financial recovery.

Hard vs. Soft Credit Inquiries

The Inquiries section details information about parties that have viewed your credit report. There are two types of credit report inquiries.

A hard inquiry is placed on a consumer’s credit report when they apply for new credit. Submitting an application for a mortgage, car loan, credit card, etc., allows a lender to review your credit history to determine eligibility. It can cause a minor credit score drop and will typically affect the report from one to two years.

A soft inquiry is what a credit bureau places on your report when someone is reviewing it, like when you pull it for your annual review. There may also be soft inquiries from lenders who request this information for marketing purposes. Rest assured, these inquiries do not impact your credit score.

When reviewing this section, pay particular attention for unauthorized parties who have accessed hard inquiries. Of course, any discrepancies should be noted and immediately addressed. We recommend Suite Solutions, a reputable credit reporting company, as they produce and analyze the credit reports for many of our clients. We find their comprehensive report (one that compiles information from all three credit reporting agencies) to be helpful in tracking errors and issues.

Knowledge is power. Come back for the last installment of this series where we’ll cover how to handle collections and discharged debts from bankruptcy, as well as rebuilding credit.

About Sean Hanley

Practicing law since 2007, Sean specializes in the ever-changing laws related to real estate, business and estate planning. Embracing technology with a focus on personalized service, he understands the challenges of living and thriving in Silicon Valley. Tapping into his education in economics and business administration, Sean also serves on the non-profit Willow Glen Business Association.

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