On July 1, 2017, the three national credit bureaus are going to stop collecting and reporting substantial amounts of civil judgment and tax lien information.
In fact, the credit reporting agencies will remove this data from reports if the information does not provide complete details on consumers i.e. person’s name, address, Social Security number, or date of birth.
What are tax liens and civil judgments?
Tax liens are levied against properties when the owner is delinquent on payment of taxes. Civil judgments are ordered by courts in legal disputes, typically involving monetary damages – debts owed by the losing party. Tax liens and civil judgments negatively impacts your credit scores and remain on credit files for extended periods.
How this change will affect you?
A study by credit scoring developer VantageScore Solutions which was created by the three credit bureaus, estimated that 8 percent of consumers would see an average score increase of 10 points on its most widely used scoring model if all civil judgments and tax liens were removed from credit reports. While 8% and 10 points may sound small, in the mortgage business they equate to significant numbers for applicants.
When this information appears on credit reports, it can affect your ability to obtain credit, loans or receiving consideration for employment. This change is a step in the right direction of minimizing the impact of non-loan related items on your credit score.
THD Credit can help!
If you have tax liens or civil judgments appearing on your credit report, give me a call or email me. We can check out your options for getting them removed sooner.