There are new rules for credit reporting agencies, starting July 1, 2017
What is NOT Reported
Starting July 1, 2017 the three major credit reporting agencies (Equifax, Transunion, and Experian) will stop reporting most judgments and tax liens on consumer’s reports. They will also remove the already existing judgments and tax liens on reports, which could take another month or two.
Why the change?
This is all part of a 2015 settlement between the Credit Reporting Agencies and 31 state attorneys general. In addition, the Agencies have been feeling pressure from Congress and the Consumer Financial Protection Bureau.
These rule makers and consumer advocate groups complained about the high amount of inaccuracies due to judgments and tax liens. These inaccuracies are so high for these items because most public records aren’t allowed to show social security numbers (for privacy and security reasons). So it’s easier for the agencies to make mistakes and put a Judgment on the wrong person’s credit report.
The Good News
The potentially good new for consumers is that this change alone may improve many credit scores because of the tax liens or judgments being removed from their reports.
And, The Bad News
On the other hand, it will be harder for people to find and identify old tax liens and judgments by simply looking at their credit reports. The problem with this is when a consumer tries to clear up old debts and judgments (either by paying them or filing bankruptcy against them), they will be harder to find.
In Florida, for example, judgments are still valid for up to 20 years. If a consumer thinks they’ve cleared up all old debts, but missed a judgment, that judgment holder can suddenly garnish wages, seize a bank account, or take other actions. There are 67 counties in Florida alone. Consumers now must decide whether to take on the potentially costly task of having public records searches done in any county where a judgment may have been recorded against them.
Peter Blinn
For over 35 years, listening to clients and putting them at ease, while finding solutions and helping achieve future goals, in Marion County, Lake County. Citrus County, Sumter County, and The Villages.
