Your credit score might be going up next week.
BUFFALO, N.Y. – Your credit score might be going up next week.
Three of the biggest credit reporting companies are now excluding tax liens from their reports. That means some people may see their score jump by as many as 30 points.
Mike Curatolo from Georgetown Capital answered some of our questions about the new reporting standards.
“Who will see the credit score change?” asked 2 On Your Side’s Kelly Dudzik. “Just the people who had tax liens or everybody?”
“Nope, just the people who have the tax liens. There’s about five-million people out there that have tax liens on their credit scores, and after April 18, they’re going to be taken off the credit scores, so once you remove that, it’s just natural that your credit looks better because you don’t have this big debit sign on it,” says Curatolo.
“If everybody’s credit looks better, or the people with the tax liens, their credit looks better, how will banks be able to tell who’s riskier and then will all of us end up having to pay higher interest rates?” asked Dudzik.
“That’s a very good question. If you go to get a car loan and you owe the county ten-thousand dollars, but Ford or GM, whoever you get the loan from doesn’t know that, you know, they have to spread the risk out to everybody. You know, that’s going to be kind of minuscule. But, the bottom line is you will look better to the credit agencies if they don’t see that tax lien on there,” he says.
“Why was this change made?” asked Dudzik.
“Well, over time, all these tax liens are pulled from public records. So, if you name is Billy Bob Bower and you were born in 1962 and you went to the same hospital as someone else named Billy Bob Bower, and you didn’t pay your bill, the credit agencies don’t know exactly which person has the good credit,” says Curatolo.
“Really, so it gets all jumbled up?” asked Dudzik.
“It gets all jumbled up and there’s been many horror stories of the credit agencies giving the wrong Billy Bob Bowers,” says Curatolo.