The three primary credit bureaus will eliminate any tax lien information from consumers’ records, which ends the process of eliminating certain types of negative information from credit files. The process began in 2017, but it had only address half of the tax liens consumers could be hit with.
It won’t be long though before all of them will be scrubbed from TransUnion, Experian and Equifax’s records for good.
How Will Scores Be Affected?
According to LexisNexis Risk Solutions, the people who are affected by tax liens could see a 30 percent rise in their credit score. The Consumer Data Industry Association cautioned that a modest boost would be more likely rather than a huge increase.
LexisNexis has estimated that 11 percent of Americans have some type of judgment or lien against them and will see those removed April 16.
To learn if your score is affected, you can check out CreditSeasme or CreditKarma to attain a free non-FICO score. You can also go to a credit card or loan lenders that give you a free FICO score, either by logging onto their website or in a monthly statement.
What Factors Determine Your Credit Score?
There are five factors that affect your credit score:
- Payment history – 35 percent
- Debt owed – 30 percent
- Account mixture – 10 percent
- Credit history length – 15 percent
- Recent inquiries – 10 percent
As you see, your payment history and amount owed weigh heavily on your credit score.
Why Do You Need A Good Credit Score?
Your credit score is the gatekeeper in getting better interests when you’re borrowing money or lower premiums for your insurance. It’s not uncommon for an employer to run a credit check to see what your score is before you’re offered a job. The important thing is that your credit score stays good because it does affect how much you save in the long run.
The FICO score is broken down into a range of 300 to 850.
- 300 to 579 is rated as poor credit
- 580 to 669 is considered a fair credit score
- 670 to 739 is thought to be a good score
- 740 to 799 is regarded as a very good score
- 800 or more is seen as excellent