Beginning July 1, 2017, the three major credit bureaus – TransUnion, Experian, and Equifax – will exclude information on civil judgments and tax liens from consumer reports unless that information has been verified. In order to be included in the credit report, new and existing tax lien and civil judgment data must: 1) include a person’s name and address as well as Social Security number or date of birth; and 2) credit bureaus must verify public record information with courthouse visits at least every 90 days. The change is part of the National Consumer Assistance Plan.
Credit reporting has been an area plagued with complaints over the last several years. In its June 2017 Monthly Complaint Report, the Consumer Financial Protection Bureau (CFPB) noted that credit reporting complaints ranked third in overall volume, with the majority of those complaints related to incorrect information. The CFPB also issued a report on March 2, 2017 highlighting its oversight of consumer reporting companies, including problems and corrective actions. The NCAP’s goal of making credit reports more accurate and making it easier for consumers to correct errors should decrease the number of errors and, therefore, complaints related to credit reporting.
While this change will likely result in slightly better credit scores for affected consumers, there are concerns that excluding tax lien and civil judgements (that do not meet the criteria) could create an inaccurate picture of the risk associated with some consumers.
Information on the National Consumer Assistance Plan is available here.