Good news for consumers
While the concept and purpose of a credit score are easy enough to grasp, the process of actually determining your score is something that’s completely unknown and foreign to most people. Thankfully, the three major credit reporting companies—Equifax, Experian, and TransUnion—are held to standards, however opaque, and a new change in reporting is going to result in raised credit scores for millions of Americans.
If you’ve got a tax lien or civil judgment against you on your credit report, you’re likely to see a bump in your score around July 1. The reason? If those two items don’t contain all of the following: name, address, social security number, and date of birth, the strike will be removed from your report. It’s thought that many, if not most, such instances don’t contain all the data, so many people will see the items removed and a subsequent rise in their score.
While this is good news for consumers, banks take issue with the new change, since the administrative errors will result in making potential borrowers look more creditworthy than they may actually be. There’s no master list of those benefiting from the change, so the only way to know if you’re in for an improved score is to take stock of the items on your credit report to see if it includes a tax lien or civil judgment that may be lacking the required data.
For 12 million Americans there will be, and they’ll be pleasantly surprised come midsummer, and the impact could extend beyond the financial world: