Credit Reports Are Improving

And your credit score may improve too!

One of the biggest issues with credit scores is that they draw from credit reports that might include inaccurate information. There’s a reason why we’re supposed to check our credit reports at least once a year: to confirm that everything on the report is correct and to request that errors—such as a debt that might actually belong to some rando with a similar name—be removed.

But the three credit reporting agencies—Equifax, Experian, and TransUnion—are now doing their part to prevent some of these errors. I’ll let Forbes explain:

Credit Scores Will Improve As Credit Reports Exclude Negative Information

As of July 1, the nation’s three credit reporting agencies will remove and exclude certain negative information from credit reports. Tax liens and civil debts will no longer be reported on credit reports if the negative information does not include a customer’s name, address and Social Security Number or date of birth.

In other words: if they don’t have enough information to prove it’s you, they won’t include it on your credit report.

How does this kind of false information get on your credit report in the first place? BuzzFeed sums it up nicely:

Millions Of People’s Credit Scores Will Get A Boost This Year

Court orders for unpaid debts are rarely obtained by the company that was originally owed the money — or even by the debt collectors they hire to chase down overdue bills. Instead, bad debts are sold further down the food chain as they get older and harder to collect, eventually making their way to buyers who pay pennies on the dollar for the right to try and recover the money.

[…]

These kind of court judgments have faced much scrutiny in recent years, as investigations revealed judgements connecting people to unpaid debts were often incomplete or wrong, due to sloppy record keeping.

So the credit reporting agencies are no longer going to accept sloppy records, which means that people are going to have fewer inaccurate items on their credit reports, which means that their credit scores will likely rise.

Have you ever found something incorrect on your credit report? Was it easy to prove that the debt (or other negative information) did not belong to you?

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