Life’s about to get better for a lot of people with their credit score. That all-important three-digit number may be rising soon without any effort on your part. That’s great news! All three credit bureaus - Equifax, Experian,, and TransUnion - announced that they'd review how they deal with negative credit information and make some changes.
Why Credit Scores May Rise
Equifax, Experience, and TransUnion’s recent announcement included that they intend to drop certain debt types and items of questionable accuracy from credit reports. The makeover will likely result in higher credit scores for many consumers. Changes to your credit report trigger change to your credit score since it’s the data used to power the algorithm.
The more negative information the bureaus delete from your report, the greater the impact of this change on your credit score. This is a huge change, particularly if you’re planning a big financial move soon. If you’re purchasing or refinancing a home, considering buying a car, or other major credit-based purchase, this could be a boon for you.
Changes Coming – What Will Be Deleted?
Some of the items the credit bureaus will likely cull from consumer credit reports include:
Will Your Score Change?
The changes don’t mean every consumer will get an increase in their credit score. However, if you’ve got one of the above items on your report, you might land a score increase. The significance of the impact will depend on how much the negative item was dragging down your score. You might see a shift of more than 40 points according to Federal Reserve data.
Check for change and then leverage it. If you’re preparing for a major purchase like a home or auto, you may want to delay until you see the impact and then check if you’re close to a new threshold and work to further improve your score before applying. If your score rises, it might be a good time to renegotiate credit card rates for a sweeter deal.
When you’re looking to improve your credit score, check out Credit Score Keys.