New policy governing credit reporting criteria.

Credit Score can make or break a consumer.

Starting July 1, 2017, the three nationwide consumer reporting agencies, Equifax, Experian and TransUnion, are starting a new policy that will raise about 12 million consumers’ credit scores as much as 10 points.  This could mean the difference in qualifying for a better interest rate when financing a vehicle or other cost savings benefits.

The companies are instituting this new policy following a settlement with lawmakers in more than 30 states. Attorneys general alleged liens and civil judgments were often attached to the wrong people, unfairly hurting their ability to access credit for a home, car or gym membership.

Lien or judgment does not match criteria will no longer appear on a credit report

After July 1st if a lien or judgment does not match three of the four criteria of name, address, social security number or birthdate, it will no longer appear on a credit report.  Many courts have specific requirements before a creditor can record a judgment (many requirements are ignored more than honored).  This new policy may bring a focus on the court requirements as related to recorded liens/judgments.

See also: Here’s one thing consumers still don’t understand about their credit scores

Increases in a consumer’s credit score can move them into a more desirable credit category which could mean qualifying for more cards and other forms of credit with lower interest rates.

  • Tax liens and civil judgments will remain on credit reports as long as the citation includes the person’s name, address and either the date of birth or the Social Security number. It is anticipated that 40%-50% of tax liens will remain on credit reports.
  • Because civil judgments do not generally adhere to these enhanced standards, they will be removed from consumer reports. It is estimated that only about 4% of civil judgments might remain on reports.
  • Medical debt that is less than six months old will not be reported beginning Sept. 1.

The Consumer Financial Protection Bureau tracks consumers’ complaints, and one of the most frequent is about incorrect information on credit reports.

The bottom line – don’t take on credit unless you can pay the debt (easy to say, but hard to do).  As a bankruptcy attorney I see the optimistic use of credit the start of a slow downhill slide into financial distress.  “Learn to use credit, rather than credit using you”.  Some of my lessons are due to personal challenges.  Diane L. Drain

412 words|2.1 min read|Categories: Bankruptcy Videos, Consumer Financial Protection Bureau, Credit Report|By |Published On: July 13th, 2017|Last Updated: September 14th, 2022|

Share this article

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Martindale-Hubbell Award
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Martindale-Hubbell Award
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau

In Case You Missed It

  • BEWARE OF THE SECRET COSTS OF USING ‘BUY NOW PAY LATER’!! What You May Not Know About These Services Services like “buy now pay later” now account for $100 [...]

  • Every client deserves competent advice in order to plan their life, but they also need to be able to avoid unforeseen results.  They also deserve to be treated with respect and compassion by everyone involved [...]

  • Published On: July 13, 2020

    CREDIT BUILDER LOAN COULD HELP CONSUMERS BUILD OR REBUILD THEIR CREDIT (reprint from CFPB) July 13, 2020, the Consumer Financial Protection Bureau (Bureau) released a report indicating that a credit [...]

  • The question – can a President remove the Director of Consumer Financial Protection Bureau (CFPB) ‘just because’? The answer – yes.  But then it gets a little more complicated.  The [...]