These New Credit Reporting Changes Could Affect Your 2017 Credit Score

Millions of Americans are set to benefit from new credit reporting laws going into affect by July 1, 2017. In a statement made by the Consumer Data Industry Association (CDIA), the three major credit bureaus will be dropping tax liens and civil judgements from a consumer’s credit report if it doesn’t meet the new criteria. They estimate that  12 out of 200 million credit scores will see a small boost to the score around July 1st.  If you’re one of these 12 million, you can expect to see around a 20 point increase to your current credit score.

How it works

Following a lawsuit, the major credit bureaus took action to ensure that only the most up-to-date and accurate information is being reported. By July 1st, if you have a tax lien or civil judgement on your record it will be removed if it doesn’t supply the following information:

1. Name
2. Address
3. Social security number or birth date

Tax liens and civil judgements appear when a creditor takes a borrower to court over unpaid debt. The CDIA expects most civil judgement data and at least half of the current tax lien data to not meet the new standards.

How it will benefit you

If you currently have a tax lien or civil judgement on your credit report, it will likely be removed, giving your credit score a small boost. Your credit score is representative of how trustworthy you are with managing your finances and repaying debt. It is used by:

• Lenders to determine if they will approve your loan and at what interest rate
• Employers of certain industries to determine if you’re a suitable candidate
• Insurance and utility companies to determine if they will charge you a premium or require security deposits
• Landlords to determine if you’re approved to rent an apartment or other type of property

High credit scores help you access greater financial opportunities and save you money long-term. To see an even larger boost to your credit score beyond these new credit reporting laws, check additional tips from the experts here.

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