Starting July 1, the Big Three Credit Bureaus Will Delete Many Tax Liens & Civil Judgments

Starting July 1,2017, Experian, Equifax and Trans Union will delete tax liens and civil judgments from consumers’ credit reports unless they include the person’s name, address and either their SSN or date of birth. About half of tax liens and virtually all judgments do not have a SSN or date of birth. The problem with the tax liens and judgments lacking this identifying information was that the information lacking personal identifying information often belonged to some other person. The bureaus are making these changes having received pressure from regulators and state attorneys general to improve the accuracy of their reports.

This change will be especially helpful in raising credit scores of persons who have a tax lien or judgment but otherwise have little or no negative reports.  According to FICO, about 12 million persons will have a lien or judgment disappear from their reports. This is out of 200 million persons who FICO deems credit “scorable.” Of the 12 million, about 700,000 consumers will see an increase of 40 points or more, quite a significant improvement and enough to qualify for a mortgage or other loan in many cases.

San Francisco Chronicle business columnist Kathleen Pender has an excellent report on these changes in today’s edition.

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