Rule change could improve your FICO credit score

If you’ve heard that some people might get a magic boost to their FICO credit scores in the 10-point range — without having to do anything — you’re right. But hundreds of thousands of consumers’ increases will be much larger.

According to a massive new study of 30 million credit files just completed by score developer FICO, many Americans will experience score bumps in the coming months, mainly modest increases of less than 20 points. But hundreds of thousands of the increases will be super-sized — in the 40 to 60 points and higher range. The vast majority of consumers, however, will see no change in their scores.

Some basics here: The changes are tied to forthcoming policy initiatives at the three national credit bureaus — Equifax, Experian and TransUnion. As part of an agreement with a group of state attorneys general, in early July the bureaus will stop collecting and reporting public information on virtually all civil judgments (monetary damages awarded by courts against the losing parties in civil disputes) and roughly half of all tax liens (levies against properties when taxes go unpaid). The bureaus have determined that the accuracy of the public records in both these areas does not meet their quality standards. So they are going to remove them from the credit reporting process altogether.

Since these two items traditionally have counted as serious negative indicators of a consumer’s creditworthiness, they depressed credit scores. But because there…

Read the full article from the Source…

Back to Top