Bad Credit Score? Listen Up! You May Be In Luck!
If your credit score’s not optimal, you're certainly not alone. But millions of Americans have blemishes on their credit scores that shouldn't be there. If you're one of them, we've got you covered. Listen up to some changes (QAVERIFY) that may help you! Here with what you need to know is Shari O.
What are the changes?
- Traffic Tickets-Court Fines
- Tax Liens-Civil Judgments
- Public Records Information
- Medical Debt Collection
- Date Furnishers
Well we've known for a long time now that the credit bureaus need to improve the accuracy of their reports, which are often outdated or flat out incorrect. And, of course, mistake on your credit report can wind up in credit card application, car or even home loan denials. That’s because FICO scores range from 300 to 850 and lenders generally favor loaning to those of us with 640 or higher scores. And, even if you do get approved, you often wind up paying more for the same loan as someone with good credit, in the form of higher interest because the lender believes they’re taking on a higher risk by loaning money to you and, understandably, want to be paid for that risk.
So the three major bureaus, Equifax, Experian and TransUnion, have already made some adjustments, like removing traffic tickets and court fines from our files. But now (QAVERIFY) they’re eliminating two other common major of negative information, tax liens and civil judgments. On top of that, the bureaus will now (QAVERIFY) be required to update their public records information at least once every three months or so and they’ll be following stricter rules on the information they collect about us from public records, essentially requiring each citation to include the our name, address and Social Security number or date of birth (QAVERIFY). Most civil judgments and at least half of all tax lien records don’t meet that standard and will, thus, be eliminated from our credit reports (QAVERIFY).
And there’s more. A few months from now (September) reports will eliminate medical debt collection accounts under six months old in order to protect us from what can now be a fairly long process of resolving health insurance reimbursements (QAVERIFY). And data furnishers - the companies that provide information about us to the credit bureaus - will be required to include your full name, address, birthdate and Social Security number in their reports (QAVERIFY). So all of these changes are aimed at improving accuracy and protecting us from having to suffer from or fight information that should not be on our credit reports in the first place.
What happened that's finally getting the credit companies to do this?
- Lender Perspective
Well, consumer advocate and government regulators have been working to fix unfair problems with credit reporting and scores for a long time. There have been countless lawsuits and the terms of some of those settlements require the bureaus to make some of these changes. In fact, much of this began two years ago (QAVERIFY), when a coalition of 31 state attorneys general cracked down on the credit bureaus and negotiated a deal that required them to take some of these steps.
Look, it’s a balancing act. Lenders, obviously, don’t want borrowers with actual credit blemishes to slip through and seem more creditworthy than they actually are. But the reality is that over 90% of folks with a negative public record, for example, have other negative information on their credit file, like late payments, anyway. So lenders should still be able to accurately assess risk on the loans they make. And as consumers, if you’re in that bucket, you still won't qualify for the lowest risk, lowest interest rate and best terms loans. And lenders can still get information, for example, about our liens and judgements from other data providers that are not subject to the settlement terms and these new rules because they don’t have the same history of mistakes as the three primary credit bureaus.
So, at the end of the day, how many of us does this impact?
- 220 Million With Judgement-Lien
- Over 15 Million Removed/12 Million Improved
- Avoid Frustration
Around 15.4 million (7%) of the 220 million of us with credit reports will have a judgment or lien removed from our file as a direct result of these new rules (QAVERIFY). About 12 million of us will see an actual improvement in our credit score, typical by up to about 20 points (QAVERIFY). And, hopefully, we’ll all be able to avoid the frustration of having to deal with a credit issue that doesn’t even belong on out report in the first place. So, for those folks thinking about getting a loan or taking the time or hiring a company to help clean up errors on your credit report, it may make sense to wait a few months because there’s a good chance they’ll clear up on their own in light of these new rules.