Liens and judgments are legal claims made against an individual or business for failure to pay debts owed to creditors. Private companies often collect this information through various methods such as searching public records, conducting interviews, or purchasing data from other sources. The information is then compiled into databases that can be accessed by potential creditors or other interested parties.
However, verifying a lien or judgment record can be a complex process due to several challenges. The information available in public records may not be complete or up-to-date, making it difficult to verify the accuracy of a lien or judgment record. Multiple sources of information such as court records, credit reports, and public records can also make it challenging to consolidate all of this information into a single, accurate record. Spelling variations of names or the use of aliases can also make it difficult to match up records, and mistakes can happen during the recording or reporting of lien or judgment information leading to inaccurate or incomplete records. Additionally, the statute of limitations may have expired for a particular debt, meaning that the lien or judgment is no longer valid.
In 2018, the three major credit bureaus, Equifax, Experian, and TransUnion, made the decision to remove lien and judgment records from their credit reports due to accuracy concerns, legal changes, and consumer protection. The accuracy of lien and judgment records in public records was often in question, and this led to inaccuracies in credit reports, which could negatively impact individuals’ credit scores. The major credit bureaus also settled with state attorneys general over the accuracy of their credit reports, agreeing to change their practices for reporting public record data, including liens and judgments. This decision was seen as a way to improve the accuracy and fairness of credit reporting and better protect consumers.
It’s important to note that while lien and judgment records are no longer included in credit reports, they are still available in public records. Potential lenders and creditors can still access them through other means, and individuals should ensure that any potential errors or inaccuracies in their records are addressed to avoid negative impacts on their creditworthiness and financial standing.
