A Better Credit Score is in Your Future

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If your credit score is lower than what you are happy with, you could be in luck because the major credit reporting agencies in the nation are in the process of removing any records of two of the biggest sources of negative credit information they have on borrowers: civil judgments and tax liens.

With this information no longer reporting, an estimated 12 million people will see a boost in their credit score. That’s pretty incredible news!

What sparked the decision to remove tax liens and civil judgments from credit reports? Both advocates for consumers and government officials demanded the credit bureaus do something to enhance the accuracy of the reports that they keep. Why? Because credit reports often contain a combination of mistakes and inaccurate information. Such errors negatively impact borrowers’ ability to acquire various forms of credit, including car loans, mortgages, and credit cards. Additionally, they can lead to higher interest rates for those who can borrow money.

As of July 1, Equifax, Experian, and TransUnion – the biggest credit reporting agencies in the United States – started to enforce stricter policies regarding the public records that they collect. Every citation must now highlight a person’s name and address, as well as his or her date of birth or social security number. In the past, the majority of civil judgments and a large percentage of tax lien records did not meet these standards. As such, they will be completely removed from consumer credit reports.

This change will be very beneficial for any borrower who may have a negative public record that could affect his or her credit report. It will also assist the countless individuals, who have fought, usually to no avail, to have inaccurate information taken out of their files.

Now that there are some positive changes to credit reporting, here are some tips on how consumers can keep their credit score in good standing:
  • Always make sure to pay your credit card balances in full, every month. Paying credit card balances in full boosts your credit score as well as helps avoid hefty interest added to your balance. The more interest you have on your credit card bills, the harder it will be to pay down what you owe.
  • Keep balances lower than 30% of your available credit line on all of your credit cards. If your balances are higher, your credit score will take a hit.
  • Keep track of your accounts and look for any unusual activity. If you see anything suspicious – a charge for a purchase that you didn’t make, for example – contact your lender right away.
  • Make all payments on time, including your mortgage, car loan, credit cards and any other payments that you have to make to a lender. If you are going to be late, contact your lender immediately. Depending on the lender, you may be able to negotiate late fees and avoid a negative reporting.
  • Limit applications for new credit. Whether you are applying for a credit card or an auto loan, every time you apply for any type of credit, your credit score takes a hit.

If you have any questions about your credit report, or you are wondering if these changes will affect you, contact Tayne Law Group, P.C.

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