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ICFE eNEWS #17-26 - July 6th 2017

ICFE E-NEWS Consumer Alert What's Being Removed From My Credit Report?

By John L. Culhane, Jr. on January 5th, 2017

If you have a civil judgment or tax lien on your credit report, we've got some good news for you: It might be gone come July 2017.

That's when the three major credit bureaus - TransUnion, Equifax and Experian - will start to require more documentation for such public records. As a result, all existing civil judgments as well as more than half of all tax liens will be wiped from consumers' credit reports, according to the bureaus. And the average person who's affected will see his or her credit score rise by about 10 points.

While any credit-score increase associated with these changes is unlikely to exceed 20 points, every piece of negative information that falls off your credit reports is good for your credit score. So we definitely recommend reviewing your credit reports on a regular basis, both to confirm the removal of problematic public records and to make sure no other mistakes wind up costing you money.
What's Being Removed From My Credit Report?
Everyone's on board for higher credit scores. But a lot of us aren't up on the latest credit-industry lingo. And the terms "civil judgment" and "tax lien" are hardly self-descriptive.

So here's a quick overview of the two types of records that the credit bureaus are cracking down on:

Having a Civil Judgment on your credit report means you've lost a lawsuit and the judge has ordered you to pay the debt for which you were sued. This tells potential lenders that the government is first in line for your disposable income, meaning less is left for credit card and loan payments.

A Tax Lien turns physical property - usually a house or car - into collateral for an unpaid tax obligation. It basically prevents you from selling that property before paying the government what it's owed.

Both will be listed in the Public Records section of your credit report. Your WalletHub Credit Analysis grades can also quickly give you a sense of whether you have anything to worry about.
Will My Credit Score Improve?
You can monitor your credit score for free on WalletHub to see if it improves. WalletHub is the only site with free daily credit score updates. So you'll know as soon as anything changes.

Check Your Free Credit Score

We can also learn a lot from some research that VantageScore - one of the leading credit-score companies - released about a year ago, examining what would happen to credit scores if civil judgments and tax liens were removed from consumers' credit reports entirely. The results aren't perfectly applicable to the present situation, as tax liens with the proper documentation will remain in real life. But they do provide a pretty good sense of what to expect.


Here are the percentage chances of an individual's credit increasing, in the absence of tax liens and civil judgments:
Credit Score Range Chance of Improvement
300-350 22.3%
351-400 30.5%
401-450 30.6%
451-500 33.9%
501-550 19.5%
551-600 15.2%
601+ 1.8%


ICFE strongly recommends that you review your credit reports from time to time in the coming months. For one thing, you'll need to confirm the removal of civil judgments and tax liens, or at least inquire about any that remain. In addition, there are plenty of other credit-report errors to watch out for. And catching them early will save you a lot of time, money and effort.
You're entitled to a free copy of each of your major credit reports once every 12 months from AnnualCreditReport.com



Paul S Richard PhotoICFE eNEWS is available FREE upon request by visiting our Web site and filling out the contact form, and selecting "Yes" for "Add to Mailing List. Please pass this eNEWS on to your peers and interested others and invite them to subscribe for free. Also, visit the ICFE's new Web site: StudentDebtHelp.org

Sent by:

Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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