Consumer advocates have long been pushing for improvements in the accuracy of reports from the credit bureaus, and now they’ve met with success. Equifax, Experian, and TransUnion are applying new, stricter rules to the information they gather from public records.
The changes primarily affect two major sources of inaccuracies in credit reports – tax liens and civil judgments. These are two areas over which hundreds of lawsuits have been filed and thousands of individuals have vainly fought to have incorrect information removed from their files.
From now on, in order to be included on a credit report, records must include the subject’s name, address, and either their date of birth or their Social Security number. This move should eliminate the possibility that your credit report will contain information about some other person who happens to share your name.
Since nearly half of all tax lien records and nearly all civil judgments do not meet this requirement, they will be stricken from credit reports, raising credit scores for approximately fifteen and a half million people in the U.S.
Changes in credit bureau policies have been happening for the past two years, when 31 state attorneys general got together to crack down on the credit bureaus. Following a deal that was negotiated, credit bureaus had already ceased including traffic tickets and court fines in their files.
According to Fair Isaac, FICO scores will typically increase 20 points or less, but that could be just enough to allow some people to buy a home or a car, get a school loan, or obtain a credit card. For others, it could make a difference in the amount of interest they’ll be required to pay.
Those individuals who have been battling to get incorrect information removed from their files will now be spared the frustration and the endless hours of trying to prove they are NOT the Joe Jones or Suzie Smith with a tax lien or a civil judgment.
Naturally there are those who fear that the result of this change will be loans granted to individuals who are not credit-worthy.
If you’ve been plagued by an inaccurate credit report and are ready to see how these changes have affected your own ability to purchase a home, call us at Homewood Mortgage, the Mike Clover Group.
Whether you’re ready for pre-approval or simply have questions, just call. Reach us today at 800-223-7409.