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


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

New way to treat tax liens and civil judgments

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 qualifier — “most tax liens and civil judgments,” though not all.

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. That’s to ensure 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 like:

  • A person’s name
  • Address
  • Social Security number and/or date of birth

In many cases, the bureaus only have a fraction of the complete picture. That’s the situation approximately half the time, according to the Consumer Data Industry Association.

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 — and what the new rules aim to correct — 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 money expert Clark Howard himself back in 2011! Read about what the consumer champ did when a tax lien was wrongly put on his TransUnion report.


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. Doing so only reduces your available credit.

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

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