Millions of consumers should see a bump in their credit scores thanks to changes being implemented by the three major credit-reporting agencies.
Experian, Equifax, and TransUnion will remove certain tax liens and civil judgments from credit reports starting July 1. The move is part of the credit bureaus’ National Consumer Assistance Plan, created to make credit reports more accurate and easier to correct for consumers.
Tax liens and civil judgments that include a name, address, and a birth date or Social Security number will stay on credit reports, but a vast majority of civil judgment data and about half of tax lien data don’t meet this standard, according to the Consumer Data Industry Association. Omitting this data will improve the FICO scores of about 12 million U.S. consumers, according to the company. Of those, 11 million will see an average increase of 20 points, while about 700,000 U.S. consumers will see a bump of about 40 points.
These changes come after regulatory concerns and settlements with more than 30 states over how the three major credit-reporting agencies handle errors on reports.