Changes to Credit Scoring Coming Soon!
Here's potentially good news for consumers: The nation's three largest credit-reporting agencies will soon exclude tax liens and some civil debts from their reports.
This could improve consumer's credit scores as long as they don't include consumers' names and addresses, as well as Social Security numbers and or dates of birth. Many liens and most judgments do not include that sort of information due to security reasons.
Although the changes could be better for a consumer's credit worthiness, the new policies could possibly make loan-screening more difficult for lenders. Nessa Feddis, senior vice president for consumer protection and payments at the American Bankers Association, said the change could mean less precise lending data for bankers, as well as potential problems for all consumers.
"The bottom line is this is not consumer-friendly," said Feddis. "People will get loans even though they may not have the ability to repay them."
As a result, credit could become tighter, or more expensive, and the cost would be borne by all consumers, she said.