As of July 2017, Experian, Equifax and Transunion are making updates when it comes to how items such as civil judgments and tax liens will appear on your credit report. Most Americans won't see any changes to their credit score, but it's good to be up to speed on what's being reported now. We lay out what you should know about the items and what exactly is changing:
What part of my credit report could be impacted?
Tax liens and civil judgments are two types of public records that appear on your credit report if they've been reported to a credit bureau. A complete tax lien or civil judgment that is reported includes the following pieces of information: a name, an address, and either a birth date or Social Security number.
What is changing?
These items will still be reported to the three major credit reporting agencies (Experian, Equifax and Transunion). However, now there are additional criteria for them to appear on your credit report. Since many entries lack these data points, the credit reporting agencies are no longer going to present an entry if it doesn't include at least three of those four criteria. Liens and judgments are negative events that can hit your credit report—and their removal may cause a slight increase in your credit score once they fall off your credit report after seven to ten years.
Will my credit score change?
The majority of people won't be impacted. Estimates by FICO and most analysts indicate that 6-7% of people with credit scores may see these items come off their credit report with this change implemented, so those 12-15 million people may see a slightly increased credit score (likely 20 points or less). Your credit scores are calculated based on information on your credit report that's reported to credit agencies by various sources such as lenders, creditors, and financial institutions. So negative information on your credit report can impact your credit scores. The impact depends on a lot of factors such as recency and what the item is exactly, so no two credit scores are impacted the same by an item like a tax lien.
Where do you see your public record(s)?
When you check your credit report, public records show in a section that usually appears after your personal information. They are in a separate section from accounts and credit inquiries. Tax liens (either state or federal), civil judgments, and bankruptcies are the public records you could see on your credit report.
As always, it's a good idea to regularly check your credit report and keep an eye out for anything that may negatively impact your credit score, since any negative items on your credit report can cause your credit scores to drop. You also want to be on the lookout for anything that doesn't look right as it could be something to look into further—like a potential sign of identity theft or something you need to dispute.
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