Are you are one of millions of Americans with an bogus tax lien or civil judgment on your credit? If so, your time is here! The 3 major credit reporting agencies (Experian, Equifax and TransUnion) improved their scoring models to help consumers just like you.
What and When – Judgments & Tax Liens
According to WSJ.com, 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. Tradelines on a credit report with incomplete consumer details will be removed. For example, a tax lien or judgment is missing a date of birth, full name, social security number and/or address it will be removed.
According to the Wall Street Journal, credit bureaus/debt collectors will delete public records that are not updated every 90 days.
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 due to the fact that credit scores are based on a complex set of rules and relationships between 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.
A system where $60 costs a client with top tier credit stretching over a decade over $804 per year need fine tuning. Bad information is far to easy for a creditor to add onto a credit report. Bad information is also exceedingly difficult to remove. With credit, the punishment does not always fit the crime. In summary, these FICO system improvements are exactly what is needed.
By Jeremy House