If you are looking into making a real estate purchase, there is some good news on the horizon. Starting in July 2017, the three largest credit-reporting agencies will be excluding tax liens and civil debts from their reports, helping your credit score improve. In turn, this means you may be able to obtain a better interest rate, mortgage and make a better real estate purchase.
Equifax, Experian and TransUnion are setting this new plan into motion as of July 1, which gives the companies time to correct consumer data on the reports. The revisions are likely to improve consumer scores. In order to have a lien or civil debt removed, you only need to show that your Social Security number, birthday, name or address is not on the judgment. In most cases, at least one of those items is missing.
This change is also being made to help reduce the number of credit-reporting errors that continue to harm consumers. Incorrect data added to your report, for instance, could easily harm your credit and make it hard to get the financing you want for a purchase.
There is one way this could backfire. For example, if consumers have higher credit scores and can get more credit, this could also mean they take out more in financing than they can afford to repay.
Fortunately, your real-estate transactions may move smoother because of these changes. Whether you’re planning to buy or want to sell, it means there’s a higher likelihood that you can get financing to make a purchase or that others can get the financing they need to buy from you.
Source: USA Today, “Consumer credit scores to exclude some debts, liens starting July 1,” Kevin McCoy, March 13, 2017