Why your credit score could see a 30-point boost on April 16

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Credit score
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We have some good news if you’ve had tax troubles in the past.

The three main credit bureaus will remove all tax lien data from their records in mid-April 2018, bringing to a conclusion a process of removing certain negative data from consumer credit files that first began last year.

RELATED: Want to monitor your credit? Here’s how to sign up for Credit Sesame

All tax liens will be dropped from your credit file

Last year, the three main credit bureaus made a decision to remove most tax liens and civil judgments from consumer credit files effective July 1, 2017.

While that was a big step, it only addressed about half of all tax liens.

Now, within days, Equifax, Experian and TransUnion will finish the job and banish all remaining tax liens from your records once and for all.

When will the change take effect?

The latest changes will go into effect during the week of April 16, according to this public records announcement.

How much will my score go up?

LexisNexis Risk Solutions estimates the scores of those affected by the changes could jump 30 points, CNBC reports.

However, the Consumer Data Industry Association thinks that could be overly optimistic. The CDIA calls the anticipated boost “modest,” but doesn’t offer any specific numbers regarding what consumers should expect.

We’ll just have to wait until the week of April 16 to see!

How many people will this affect?

LexisNexis estimates around one in 10 of us — 11% of Americans — have a judgment or lien that will removed from our files.

How can I check my credit score for free?

Remember, you can always get a free non-FICO credit score from CreditKarma and CreditSesame.

In addition, many credit card lenders now offer your free real FICO either on your monthly statement in the mail or when you log into your account online.

What determines my credit score?

According to this infographic from FICO, your credit score is most heavily decided by two factors that outweigh all the others.

Those factors are how much you owe on your different credit lines (30%) and how good you are at paying those obligations in a timely manner as agreed (35%).

fico score

Other factors that have less of an impact — but are still important — include how long you’ve had credit in your life (15%); what kinds of credit you have (10%) and how recently you applied for your last line of credit (10%).

Why is my credit score important and what’s a good score?

Credit scores are like the gatekeeper to better interest rates when you need to borrow and lower premiums from your insurer, among other things.

The bottom line is that having a good score can save you money throughout your life.

As to what’s a good or great score, here’s how FICO breaks out the credit score scale, which ranges from 300 to 850:

  • 800 + is considered exceptional
  • 740 to 799 is a very good score
  • 670 to 739 is considered a good score
  • 580 to 669 is a fair credit score
  • 579 and lower is a poor credit score

For more detailed info on the nuances of credit scoring, see this blog post from myFICO.

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the #1 New York Times bestseller "Living Large in Lean Times."
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