Your Credit Score May Surprisingly Rise
Credit reporting agencies are planning to remove some tax liens and civil debts from your credit report. By doing so, you may see an increase in your credit score if your credit score is currently being penalized by a tax lien or civil debt. TransUnion, Experian, and Equifax are the three biggest credit reporting agencies and they all plan to make the change by July. What is a tax lien and civil debt?
A lien is a form of security interest on a property to ensure the payment of a debt such as a loan, or some other obligation such as property taxes. A tax lien is placed on a consumer who does not pay taxes on a personal property, real estate property, their income, or other taxes. Civil debt has to do with a disagreement over money or property, and is often resolved with the help of a court. A court may determine how much debt is owed. Removing tax liens and civil debts from a consumer credit report can help out consumers who are being penalized right now, but will make granting loans harder for lenders.
Why do lenders read your credit report?
Lenders use credit reports and credit scores to learn about a consumer’s credit history. A credit report lists a variety types of credit such as student loans, automobile loans, home loans, credit cards and much more. A credit report lets lenders know how much credit you have used, how much you have paid back on time, and how much you currently owe. Essentially, lenders use credit reports and credit scores to help determine how much they can loan a consumer and figure out interest rates.
The consumer lawyers here at Doucet & Associates Co LPA help people in Ohio fix errors on their credit report. If you want to learn how to fix a credit report error under the Fair Credit Reporting Act, please read our articleFive Steps: How to Correct a Credit Report Error. If you continue to have problems getting a credit report error corrected, please call us at (614)944-5219 or send us a message online.