Starting July 1, the three major credit reporting companies will start excluding many civil judgments and tax liens from consumers’ files, which means some credit scores will move higher, possibly by as much as 50 points.
Both of these actions, of course, negatively affect people’s credit scores.
However, beginning today, July 1, Equifax, Experian and Transunion will wipe out about half of tax liens and most civil judgments from consumers’ credit files.
About 7 percent of the 220 million Americans with credit reports will have a judgment or lien stripped from their file, says an analysis by Fair Isaac, the company that provides the scoring formula most used by lenders to determine a consumer’s credit worthiness.
As of July, tax liens and civil debts will be excluded from credit files if they do not include sufficient personal identifying information: name, address, and either social security number or date of birth.