Credit scores may be on the rise. After a study conducted by the Consumer Financial Protection Bureau exposed issues with the accuracy of consumer credit reports, new standards have been put in place. These “new rules” strive to better employ new and existing public records. Most notably, the three major credit reporting companies will now exclude tax liens and civil judgments from credit reports.
Changes are already taking place.
The change began in July of 2017, when nearly 100% of civil judgment data and 50% of tax lien data were removed by credit reporting companies from credit reports. On April 16, 2018, credit reporting companies sought to remove the other 50%. Because of these improvements, some consumers could see their credit scores rise by as much as 20 to 30 points. Others may see a modest increase of less than 20 points. However, it is important to remember that even a small change in your credit score matters. A few points could be the difference between approval and denial of a loan.
What does this mean for you?
New standards and improved credit scores offer several benefits. In addition to qualifying for loans, consumers could get better deals on products like cheaper mortgage insurance. They could also see less loan level price adjustments through Fannie and Freddie Mac.
We can help!
If you’d like to discuss how these changes in credit reporting may affect you, or if you have any mortgage related questions, give the Spec Home Loans team a call at (714) 745-8947 or email us directly at info@spechomeloans.com!