Your Credit Rating May Have Just Improved.
For some people, credit scores can jump by 30 points, CNBC reports .
This is because tax liens will no longer appear on credit reports of the three major credit bureaus Equifax, Experian and Transunion.
This comes after the Bureau of Consumer Financial Protection recommended changes to the bureau last year to help consumers, according to CNBC. “Last July, credit reporting companies removed nearly 100 percent of civil judgment data and about 50 percent of tax withholding data from credit reports. Now they have removed everything else. ” The change was completed last month .
“About 9 percent of the people featured in national consumer credit databases have either a tax lien or a judgment on their credit files,” Credit Karma said in a statement. This means that about 20 million people will benefit from the change. Less than one percent of people will see a decline, according to a FICO study published by Credit Karma.
Credit Karma notes that while collateral rights will no longer appear on your report, they will still be considered by some lenders, especially mortgage lenders.
Other recent changes to credit reporting include a ban on adding debt for medical services for at least 180 days after it was reported to the agency and removing medical fees that were paid by insurance.