Dogged By A Bad Credit Score? Here’s Why Relief Could Be On The Way

By Gail MarksJarvis
Chicago Tribune

WWR Article Summary (tl;dr) Consumer advocates have long complained that many Americans are unfairly tarnished by credit reports that are wrong. Starting this month, the big 3 credit agencies will adopt new practices which may help clear up confusion regarding consumers’credit history.

Chicago Tribune

Consumers who are dogged by poor credit scores, and have trouble getting credit cards or loans as a result, will soon get some relief.

On July 1, the three credit reporting companies stopped using some records that are especially damaging to credit scores: tax liens and civil judgments.

So if someone has gone after you in court for failing to pay what you owe, or a government has placed a lien on your assets, those records will likely disappear from your credit report. An estimated 12 million people could be affected by the changes.

Of course, most Americans don’t have such a troubling past dragging down their credit history. But the new rules could also offer some benefit to people with unblemished pasts.

According to the Federal Trade Commission, about 21 percent of consumers have damaging mistakes in their credit reports. So you could be meticulous about paying back every cent you owe on time and still have false information placed on your credit history by the computers that generate the information.

The new rules should cut down on those mistakes, at least when it comes to liens and civil judgments. The three reporting companies, TransUnion, Equifax and Experian, will no longer use those records when evaluating your credit unless they can match your name, address, and either your Social Security or birth date to the records.

Fair Isaac Corp., which blends credit histories into a FICO score for each individual, estimated in a recent report that about half of tax lien public record data will not be usable under the new rules.

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