- Not all credit scores are “FICO” scores. So, make sure the credit scores you are comparing are actual FICO Scores.
- Access all 3 FICO scores at the same time. A differentiation in time could result in score differences due to time based components in the scoring model.
- Not all information is supplied to all three credit bureaus. It’s up to lenders to decide which information they report to the major credit agencies – and which agencies they report to in the first place.
- There is a possibility that you have credit under different names which may cause incomplete files at the credit reporting agencies. Typically, the credit bureaus combine all files accurately under the same person, however there are many instances where incomplete files or inaccurate data (social security numbers, addresses, etc.) cause one person’s credit information to appear on someone else’s credit report.
- Lenders report credit information to the credit bureaus at different times, resulting in one agency having more accurate information than another.
- The credit bureaus may record, display or store the same information in different ways.
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.
Keeping track of your credit is a crucial step in rebuilding your credit profile, especially after a bankruptcy. Let’s take a closer look at what happens, after the dust has settled.
Q: What happens AFTER you file for bankruptcy?
THD Expert: When you file for bankruptcy, the law says that you must list all of your debts, even if you plan on continuing to pay them. You pick and chose what debts you want to continue paying- such as the house if you want to live there or your car if you need it to get to work. But you don’t pick and chose what debts are covered. When a creditor is notified about your bankruptcy, they then report to the credit bureaus that a particular loan was “included in bankruptcy.” At that point, creditors stop reporting the payments you continue to make, such as for a mortgage or car payment. This explains why payments don’t show up on credit reports.
Q: So why is the information on your credit report wrong?
THD Expert: If the credit bureaus worked for you and me, rather than the creditors, it would probably look more like this: The credit bureaus would report your house payments as long as you are current, but they come off if you get behind. Unfortunately, we don’t make up the rules.
Q: How can you make credit bureaus report your payments?
THD Expert: Start off by requesting a payment history from your lenders (such as the mortgage company or car finance company), and use it to dispute the incorrect entries. Lenders are required by law to give you a payment history once per year if you request it. Next, take this payment history and use it to dispute the missing payments on the loan with each of the 3 credit reporting agencies (Equifax, Experian and TransUnion).
Unfortunately, you may have to do this every year as the lender may not start reporting your payments even after you have successfully disputed it.
Now that you know why payments are not showing up after filing for bankruptcy and what you can do about, you can take steps to fix it.
If you’re need help, or have additional questions give me a call or email me today.
CEO, THD Credit Consulting
Phone: (800) 822-7120
Do you have questions you would like to submit to the THD Credit Experts? Email your question to: firstname.lastname@example.org