In July of 2017, you may be 1 of 12 million consumers who will be affected by new credit reporting policies which may jump your credit score by as much as 40 points. In an attempt to bring more accuracy to credit reports, the three primary reporting bureaus (TransUnion, Experian, and Equifax) will make some important changes to their credit reporting policies.
These credit reporting changes include the removal of tax liens and civil judgments from consumer credit reports. In order for one of these types of items to remain on a report, or for a new one to be added, it will have to be accompanied by three specific data points:
- The consumer’s full name
- An accurate home address
- Either a valid Social Security number or correct date of birth.
Because it’s uncommon for currently reported tax liens and civil judgments to include this identifying information, most of them should be deleted.
Why New Credit Reporting Policies are Necessary
Lately, the three credit reporting bureaus have been under a lot of scrutiny. Recently, the Consumer Financial Protection Bureau (CFPB) brought an enforcement action against Equifax and TransUnion for lying to consumers about the value of the credit scores they were selling. The companies were ordered to pay more than $17.6 million in restitution to customers, and fined about $5.5 million to the government.
The CFPB also published a report detailing many of the problems in the reporting practices of the three major bureaus. And one major flaw in the credit reporting policies of the major credit bureaus is in the public-records section on credit reports. It is often inaccurate because of low identity-matching standards. For example, Robert Smith of Detroit Michigan may have a judgment against him that is reported on Robert Smith of Southfield Michigan. It happens a lot.
This move toward more accurate credit reporting should have happened a long time ago. Many consumers are seeing progress in their recovery from the recession, and credit ratings are gradually going up all over the nation. In fact, according to FICO data gathered by Bankrate.com, the average credit score in the U.S. hit an all-time high of 699 in April of 2016.
Scores are definitely on the rise in Arizona, even if consumer debt is still growing in the state. For the citizens of Arizona, the big challenge will be to pay their credit card debt on time and to try to reduce the running balances. You see, another major shift in credit score policy is the difference between “transactors” and “revolvers.” Consumers who charge and pay their balances in full will soon be rewarded with higher credit scores than revolvers who maintain a balance on their revolving credit lines.
Free Legal Help with Credit Report Repair
The report that was released by the CFPB also stated that in addition to having “insufficient quality control systems,” Equifax, Experian, and TransUnion do NOT “conduct reasonable investigations when consumers dispute something in their files.” And this is unacceptable.
In July, you should check your three main credit reports to make sure that items that are supposed to age off, are actually removed. You should also look for other errors and inaccuracies that might be present. You are, under the Fair and Accurate Credit Transactions Act (FACTA), entitled to a free copy of your report from each of the bureaus, every 12 months. Just go to www.annualcreditreport.com and make your requests.
If you do see anything on your credit reports that shouldn’t be there, you don’t have to deal with these mistakes on your own. At Credit Repair Lawyers of America, we’ve been helping consumers clean up their credit reports, at no cost to them, since 2008.
We would be happy to have a conversation with you about fixing your credit. It’s easy to set up your free consultation. Just give Attorney Gary Nitzkin a call at (888)293-2882 or email him at [email protected]. Or, if you want to learn more about our firm or credit repair in general, please visit our website at www.creditrepairlawyersAM.com.