By Teresa McUsic,
THE SAVVY CONSUMER
Ways to Get Free Credit Reports/Scores:
*Get your free credit report. Check your three credit reports at no cost at
www.annualcreditreport.com or call 877-322-8228. You will need to use your Social Security number. Checking one report every quarter will help protect you against fraud as well as give
you a good picture of how you are using your debt.
* Get your free credit scores, go to www.CreditKarma.com, www.WisePiggy.com or
www.Credit.com. Also, check with your credit card company. Discover Financial, American Express, Citigroup, JP Morgan Chase, Bank of America, USAA and other banks are now offering free FICO scores to their customers on their monthly bills. Discover offers it for noncustomers.
* Learn what goes into a credit score and what does not. MyFico.com is a great place to find out how scores are assessed and which parts of your financial life are part of the score, and
which are not. For example, your salary, employment history and child support are not included
in your score.
If you’ve noticed a change in your credit score this month, you’re not alone.
Around 12 million, or 7 percent of the 220 million people with a credit report should
have seen a small increase in their credit scores, because of stricter rules on public records
collected by the three credit bureaus.
The new rule requires Experian, Equifax and TransUnion to have a subject’s name,
address and either their date of birth or Social Security number on civil judgments and tax liens
before they are allowed to be included on a credit report. The new practice went into effect July
Almost all civil judgments and around half of all tax liens fail to record this information,
according to Eric J. Ellman, interim president and CEO at Consumer Data Industry Association
(CDIA), which represents the credit reporting industry.
“We believe the enhanced standards for public records carefully balance the concerns of
consumers and regulators about public record accuracy while at the same time ensuring that
creditors can continue to rely on credit report data and credit scores derived from the data,”
Also, credit reporting bureaus are now required to update their public records at least
once every 90 days, which should resolve the issue of consumers who pay their civil judgments
and tax liens in full, but don’t see those issues disappear from their credit reports for long time.
Fair Isaac, creator of the FICO credit score, predicts 12 million will see their scores raise
slightly (20 points or less).
The public records change will not have higher results on scores, however, because more
than 90 percent of people with a negative public record have other negative information on their
credit file, such as late payments, according to FICO’s analysis.
But more reforms are to come that may help raise those scores
The civil judgments and tax liens rule is part of a process of sweeping changes to
cleaning up credit scores brought on by a coalition of 31 state attorneys general, including the
Texas AG, who negotiated a deal with the credit bureaus in 2015. The settlement is the result of
a multistate investigation that Attorney General DeWine of Ohio initiated in 2012.
Under the settlement, which included a $6 million fine paid to the states, the credit
reporting agencies have agreed:
* to increase monitoring of data furnishers (companies that provide information about consumers to the credit bureaus)
* to require additional information from furnishers of certain types of data
* to limit direct-to-consumer marketing, to provide greater protections for consumers who
dispute information on their credit reports
* to limit certain information that can be added to a credit report, to provide additional consumer
* to comply with state and federal laws, including the Fair Credit Reporting Act.
“This settlement requires the credit reporting agencies to do a better, more careful job, to
produce more accurate credit reports, and to be much more responsive when consumers call to
correct their mistakes,” said DeWine.
The bureaus have already done some of the reforms, including removing traffic tickets
and court fines from credit reports.
But more reforms are to come this fall. In September, the credit reporting agencies will
stop putting medical debt on a credit report until 180 days after the account is reported to the
credit reporting agency. This could give consumers time to work out issues with their insurance
In addition, data furnishers will be required to include a full name, address, birth date and
Social Security number in their reports starting in September.
Teresa McUsic’s column appears monthly. . TMcUsic@SavvyConsumer.net