These 2 pieces of negative info will no longer harm your credit score

These 2 pieces of negative info will no longer harm your credit score
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The way your credit score is calculated is about to undergo a change that is likely to help a lot of people.

Read more: You may be able to get a collections account off your credit sooner than you think

Tax liens and civil judgments will no longer matter for most of us

Equifax, Experian and TransUnion have jointly made a decision to remove most tax liens and civil judgments from consumer credit files effective July 1, 2017, according to the Consumer Data Industry Association.

Note that we said ‘most tax liens and civil judgments.’ That’s because the onus will now be on the three credit reporting agencies to make sure they have all the identifying info for a lien or judgment — so they can be sure they’re putting the right black mark on the right person’s file!

For a tax lien or civil judgment to stick on a file, it will have to come complete with vital info such as a person’s name, address, Social Security number and date of birth.

In many cases, the bureuas only have a fraction of the complete picture.

One thing we should note here: If someone legitimately has a tax lien or civil judgment on their record and it gets removed because of incomplete information, sure, their score will go up. But that does not make them any better of a credit risk to a potential lender!

The flip side of this is that all too often, the credit bureaus will wrongly mess up someone’s credit because they don’t have their facts straight.

This even happened to Clark Howard himself back in 2011! The consumer champ details the mishap when a tax lien was wrongly put on his TransUnion report and how he managed to get it taken off.

Here’s what makes up your credit score

Most credit card lenders now offer you your real FICO credit score for free. But have you ever wondered exactly what info goes into your score?

Here’s a breakdown, courtesy of

new fico scoring rules tax liens civil judgments

Here’s how to improve your credit score

If you’re suffering from poor credit, there are several surefire ways to get your credit healthy again. Follow these tips and you’ll be well on your way:

1. Always pay your bills on time and pay down the total amount you owe.

2. Keep a low credit utilization rate. Aim to use only 30% or less of your available credit at any one time.

3. When you pay off a credit card, don’t close the account.

4. Make sure different types of credit make up your credit mix. But avoid store cards at all costs!

5. Don’t open too many new lines of credit at once.

Read more: Best ways to improve your credit score

What you need to know about store credit cards

Source: What you need to know about store credit cards by Clark on Rumble

Theo Thimou About the author:
Theo is director of content for He has co-written 2 books with Clark Howard, including the #1 New York Times bestseller Clark Howard's Living Large in Lean Times.
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