A change in the way some public records are included in consumer credit files is likely to increase scores without any meaningful change in consumer behavior.
The National Consumer Assistance Plan takes effect on July 1. The plan requires Equifax, Experian and TransUnion to reduce the amount of tax lien data they report.
In addition, 96 percent of civil judgment public record data will no longer be included in the consumer credit file reports from the trio of credit reporting agencies.
That is according to
Donald Clement Jr., the southeast regional sales manager of Credit Plus Inc., where his LinkedIn profile says he’s been employed since 1998.
Clement made the comments in
a video from Credit Plus entitled America’s Mortgage News.
Salisbury, Maryland-based Credit Plus says it has been delivering the information and services to mortgage professionals for more than 85 years.
“The bureaus only plan to report tax lien
and civil debt information on consumers when three of the four areas of personally identifiable information, otherwise known as PII, are present,” Clement said. “That includes, name, social security number, birth date and address.
“And guess what, many of those liens
and most judgments don’t include all those data points, in part, because social security numbers are often masked for security reasons.”
In addition, courthouse visits are required every 90 days to have the records be included in credit files.
No changes, however, are expected to public bankruptcy data.
Clement said that a preliminary Experian analysis indicates 96 percent of civil judgment public record data will no longer be included in the reports. Almost half of tax lien information won’t meet PII criteria.
“The FICO initial analysis found that roughly 12 million
people will see these negatives removed from their credit reports,” he explained. “And as a result, the average American’s credit score will likely push north of 700.”
Almost 11 million consumers will likely see a 20-point improvement in credit scores.
FICO is reportedly planning on
doing a more thorough analysis to determine the impact on credit scores.
So while credit scores will likely increase, actual consumer credit habits will not have changed.
