Most Tax Liens Out of Credit Scores; Short-Term Medical Debt Next
The Savvy Consumer

By Teresa McUsic,

Ways to Get Free Credit Reports/Scores:

*Get your free credit report. Check your three credit reports at no cost at 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, or 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. 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 1.

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,” Ellman said.

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 education * 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 companies.

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.

Stay tuned.

Teresa McUsic’s column appears monthly. .