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There’s a nice surprise coming July 1 for millions of consumers related to their credit report and credit score. Equifax, TransUnion, and Experian will remove negative information from nearly 12 million credit reports – and yours might be one of them. If so, you can see your credit score jump without any effort on your part. Here’s what could change your credit score.
Do You Have a Tax Lien or Judgment on Your Credit Score?
If you were hit with a tax lien or creditor judgment that was incorrect, the item should be removed. But even if the lien or judgment is totally accurate, it might still be removed from your credit score. The types of errors that could see removal from your credit score include the misspelling of your name, incorrect mailing address, or a typo on your date of birth or social security number.
In fact, even if the information listed on the lien or judgment is correct and the judgment itself is accurate and duly yours, it can be removed if there are not at least three of these four pieces of data listed properly: full name, address, date of birth and social security number. Most creditor judgments lack all of this data and many liens lack the information, so you could be looking at a boost.
There’s one more factor that could trigger a lien or judgment to be removed from your credit report in the July 1 purge. Every 90 days, public court records for liens and judgments must be updated to the credit bureaus and this doesn’t happen in many cases. That means you could have an accurate lien or judgment with all the required info but it hasn’t been updated in three months, so it can be removed.
Why Are the Liens and Judgments Being Removed?
This change in reporting tactics by all three national credit bureaus is part of their “National Consumer Assistance Plan” that resulted from a settlement after 31 state attorney generals filed complaints about inaccuracy in consumer credit reports and obstacles encountered by consumers when trying to correct errors on their credit reports.
The three bureaus are now using “enhanced public record data standards for the collection and timely updating of civil judgments and tax liens,” said Eric Ellman, President and CEO of the Consumer Data Industry Association, the national trade organization that represents Equifax, Experian and TransUnion.
How Much Will Credit Scores Rise from This Change?
Although the impact will vary widely among the roughly 12 million consumers that will see items removed from their credit reports, estimates range from 20 to 40 points which can be enough to make a significant change if you’re on the threshold of poor to fair credit or fair to good. It can represent enough of a change for you to get lower interest rates or a new mortgage.
If you have a tax lien or creditor judgment on your credit report, be sure to check your credit in August to see what happened with the July 1 change. Liens are more likely to be removed than judgments, and if you have several such items, you might benefit even more from this change in reporting. If you’re not already enrolled with a credit monitoring service, now might be a time to set that up.
If you’re trying to rebuild your credit after bankruptcy, contact Credit Score Keys now for help making the most of your financial fresh start. We help consumers improve their credit every day.