Tax Liens & Judgments May Fall off Credit

Tax Lien Judgments Fall off Credit

If you are one of millions of Americans with an inaccurate tax lien or civil judgment on your credit – your time may have finally come!  The 3 major credit reporting agencies (Experian, Equifax and TransUnion) improved their scoring models to help (according to the Wall Street Journal).

Find out when negative info falls off credit

What and When – Judgments & Tax Liens

According to, starting July 1, 2017 the major credit reporting agencies are removing tax liens as well as civil judgments from a consumer’s credit report in certain (not all) cases.  The items to be removed will be those missing complete details on the consumer.  For example, if the tax lien or judgment data is missing a date of birth, full name, social security number and/or address it will be removed.

The Wall Street Journal also reports that public records that are not updated every 90 days by the debt collector that took the consumer to court will also be removed.

Learn more about your credit report and scores

How Much Will Credit Scores Improve?

According to credit industry experts, scores based on the FICO models will improve between 20 points and 40 points on average.  Individual results will vary as credit scores are based on a complex set of rules and relationships between all sorts of data.

Change the Easy On & Impossible Off Credit System

The majority of the data reported to credit reports is accurate. However, it’s the minority of inaccurate data that hurts the most.  For example, we recently worked with a consumer who applied for a new home loan.  Their credit was the epitome of credit perfection with one tiny exception.

A pesky $60 medical collection burrowed it’s way into their credit report.  The client paid the collection immediately.  However, this one $60 blemish dropped their scores on average 100 points per bureau.  If not corrected, this $60 collection would cost her $67/month more on her new mortgage due to the higher interest rate she was not getting because of her score dropping.

Apply for a new Home Loan

A system where $60 can cost a client who has top tier credit stretching over a decade over $804 per year is in need of fine tuning.   It is often too easy for bad information to be added to credit.  That same information is often exceedingly difficult to get removed.  With credit, the punishment does not always fit the crime.  We are excited to see continued efforts to make the FICO system improve.

By Jeremy House

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Jeremy is the Founder of The HOUSE Team and a Sr. Loan Officer/Branch Manager with PrimeLending. Over the past several years he has ranked in the top 1% of all loan officers nationwide and one of the top 200 loan officers in America. In the mortgage industry, the devil is in the details. Jeremy prides himself on being a student and an expert when it comes to everything mortgage related.

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