2 Types of Black Marks Might Vanish From Your Credit File Soon

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Consumers should be glad about this change -- but many lenders will be unhappy.

Your credit scores might change for the better after July 1.

That’s when the three national credit reporting agencies “plan to stop collecting and reporting substantial amounts of civil judgment and tax lien information on public records affecting millions of American consumers,” according to a recent report by syndicated real estate columnist Kenneth R. Harney.

Civil judgments are court-ordered debts stemming from civil lawsuits. Tax liens are placed by government agencies on the properties of folks with unpaid taxes.

Currently, civil judgments and tax liens can appear in credit files and impact credit scores, Harney says, so consumers stand to benefit from this change.

However, the change could negatively impact mortgage lenders, landlords and other entities that use credit files to evaluate consumers.

For example, David H. Stevens, the president and CEO of the Mortgage Bankers Association, tells Harney that without civil judgment and tax lien information, some applicants’ credit scores might be artificially raised, creating “false positives” that make those applicants appear to be less of a risk than they are.

Time to check your credit reports

If you’re unsure whether this change will affect you, it’s probably time to check your credit reports.

The three national credit reporting agencies — Equifax, Experian and TransUnion — all keep credit reports on consumers.

Federal law requires them all to provide you with a free copy of your credit report once a year. You can obtain them at AnnualCreditReport.com.

Those credit reports will not include your credit scores, however — at least not for free.

But several other websites, such as Credit Sesame, will give you a VantageScore for free. For a FICO score, check out “8 Ways to Get Your FICO Score for Free.”

Additionally, many financial institutions now give their customers either a VantageScore or FICO score for free. You’ll find a list of them in “These 19 Card Companies Offer Free Credit Score Info.”

What do you make of the news about civil judgments and tax liens no longer being a part of credit files? Share your thoughts below or on Facebook.

Stacy Johnson

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