Tag Archives: credit score

New Credit Reporting Rules: Many may find relief from reports of tax liens and civil judgments

New rules provide credit score relief for some people who have tax liens and civil money judgments against them. Errors on consumer credit reports have been a problem for a long time and many people have incorrect information on their credit reports. New credit reporting rules take effect July 1 and change the way Trans Union, Experian and Equifax verify data regarding the reporting of tax liens and civil judgments. Now, the three credit reporting agencies must verify the individual’s name, address and either social security number or date of birth. Since so many companies omit social security numbers for privacy concerns, there may be a large group of people who will no longer have tax liens and civil judgements appearing on their credit reports. This should also help prevent future instances of information appearing on the wrong person’s credit report.

The purpose of credit reporting and monitoring

From applying for a cell phone account or utility to buying a car or home, our credit rating is used to determine where we stand on the scale of credit risk. With great credit, we present a low risk of not making our payments in full and on time. The volume of credit data and computer systems processing and sharing information open the door to error. If we do not check our credit scores frequently, someone else’s negative information could prevent you from being accepted for a mortgage loan or a new credit card. Imagine finding out your credit score was damaged by another person’s tax lien or the civil judgement entered against them.

How errors happen and how prevalent they may be

With tax liens alone, some estimates suggest that half of the tax lien information reported to the credit bureaus has ended up appearing on the wrong person’s credit report. When social security numbers are available to the individuals reporting tax liens, one missed number could cause the wrong person to receive a negative mark on their credit report.

Even if someone checks their credit frequently, or pays a few bucks every month for a credit monitoring service, the effort it can take to correct the mistake can be staggering.

How the new rules apply to tax liens and civil judgments

The rule change for reporting information to the credit bureaus about tax liens and civil judgements will require the verification of three pieces of vital information, the individual’s name, address, and either their social security number or date of birth.

By requiring three sets of identifying criteria be matched before receiving credit reporting data about tax liens and civil judgments, the likelihood of mismatches is significantly reduced.

The new rules take effect July 1. This article in USA Today has more information about the new rules and how they might apply to you.

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

 

Using credit cards and boosting your credit score after bankruptcy

 

After a bankruptcy discharge of those pesky debts you don’t miss, your available cash flow is increased and you should have more spending power. Your credit score is a function of several variables, not a mean person sitting in judgment of you. As you have more cash flow and spending ability, the decision to extend credit to you is easier because you are more likely to pay the bills when you can afford to. Once you get new credit cards there are a few things you should do to maximize your opportunity to boost your credit score.

Your credit score is determined by a variety of financial factors:

  • Credit card utilization
  • Payment history
  • Derogatory marks
  • Age of credit history
  • Total accounts
  • Hard inquiries

When you use credit cards and are working on boosting your credit score to qualify for a new home, many credit advisors will tell you to use your credit cards but not more than 30 or 40 percent of the available credit rating. It’s a good idea to pay your fixed expenses such as phone or internet with the credit card. Since you know you must pay that bill anyways, why not build your credit?

The next step with the credit cards is setting up automatic minimum monthly payments to be made by your debit card or checking account so you never have to worry about a late payment. When you pay your bill, which is easy to do now on apps on your phone, do not pay the entire balance. It is better to leave a few dollars on your balance so that it appears you are actively using the card – once a month the credit cards send a report to the credit bureaus and if your balance is zero it may look like you are not using the card and that can damage your credit score.

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!