Shelter Six:  Credit Reports to No Longer Include Tax Liens

April 30, 2018 by · Leave a Comment 

Three years ago in the aftermath of a settlement with 31 state attorney generals, the three national credit bureaus launched the National Consumer Assistance Plan (NCAP) in an effort to make credit reporting more accurate and credit problems easier to fix.

Last year, as a key NCAP initiative, Equifax, TransUnion, and Experian removed all civil judgments and the majority of tax liens from consumers’ credit reports.

After a critical CFPB report earlier this year, the three bureaus are now ceasing to report all tax liens and have been actively removing them from credit reports.

Moving forward, the only public records that will remain on credit reports will be bankruptcies, which come with publicly identifiable information such as a SS#.

According to FICO, credit scores are going to rise up to 20 points for 11M borrowers and up to 40 points for 700K borrowers.  With less credit information and higher scores, lenders are anticipating the fallout to be greater default risk.

With judgments and liens not appearing on credit reports, it will also be harder for creditors to collect forcing them to resort to other tactics such as wage garnishment and seizing funds via court orders.

Rate Update

Mortgage rates moved higher over the first half of last week only to settle back down toward the end of the week and finish nearly unchanged.

This Week

The Core PCE Price Index is due out on Monday, the ISM National Manufacturing Index on Tuesday, and Employment figures on Friday.  The next Fed meeting will also take place on Wednesday and no change in policy is expected.