Credit Ratings for Millions of People Are About to Rise

Credit is difficult. This seems to work against us more than in our favor, and there have been attempts to improve the system in recent years. In this vein, three major credit bureaus (Equifax, Experian and TransUnion) recently decided to make changes that will benefit 12 million US consumers.

According to the Consumer Data Industry Association , the three bureaus will change their standards for reporting tax liens and civil judgments. If the data does not include a complete listing of a person’s name, address, social security number, or date of birth, they will not be included, and most liens and court orders do not include all of these, according to MarketWatch. Information. The changes will take effect around July 1st. Paid tax liens remain on the person’s account for seven years .

Bankers argue that this is a bad move because it will make it harder for them to assess the creditworthiness of loans. The point is that we don’t just use credit to pay off debt. A loan affects everything from our monthly bills to your ability to get an apartment. Landlords and (some) employers check your credit, and bill providers have the legal right to charge you a commission if you have bad credit. In other words, credit is not just debt. A bad credit history can make your life difficult for many other reasons.

As a result of this change, 12 million US consumers are likely to see an increase in their estimates. How high? It depends on many factors, including how their results look in the beginning. While the move only affects about 6% of the credit-rated US population, it is a move in the right direction for the industry as a whole.

Earlier this year, the Consumer Financial Protection Bureau (CFPB) issued an appeal to the public for feedback on credit reporting. They want to explore the possibility of using other information , such as rent and bill payments, to assess credit. The idea is this: if your credit sucks, but you have a history of timely rent payments, that history should also be included in your report, as this can help improve your rating. If you have an opinion on this occasion , you have until May 18, 2017 ( provided that the CFPB, as we know, is still there ), to submit your review. They list several ways to do this:

  • Electronic : visit http://www.regulations.gov. Follow the instructions for submitting comments.
  • Mail : Monica Jackson, Executive Secretary’s Office, Consumer Financial Protection Bureau, 1700 G Street, NW., Washington, DC 20552.
  • Hand Delivery / Courier: Monica Jackson, Executive Secretary’s Office, Consumer Financial Protection Bureau, 1275 First Street, NE, Washington DC 20002.

Aside from changing the way a loan is calculated, the best thing consumers can do for their loan is to make sure they know what it looks like. You are eligible to receive a free copy of your loan every year from each of the three main bureaus, and you can get your copy at Annualcreditreport.com . Then check out our guide on how to decrypt it .

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