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Big Credit Changes Starting July 1, 2017

Great news for homebuyers! Starting on July 1, 2017, it just might get easier to get approved for a mortgage due to the credit bureaus suppressing a lot of public records, such as lien’s and judgments from the credit report. They are estimating that this will help 8.9% consumer reports, or 19.5 million users.

How is this happening? For a creditor to place a public record against someone, they will need the persons name, address, birthday, and social security number. Most of the time, lien and judgments do not have the social security number, which means in the future, mean judgments, liens, and bankruptcies might not show on the credit report if there are any discrepancies in information used to identify a person.  According to CIC credit, “These additional items will not show up on the credit report unless”:

·   Medical records have completed a 180-day waiting period to ensure all payments have been made and all insurance credits have been accounted for.

·   There is consistency among the bureaus with regard to how an item is reported

·   All authorized users reported by data furnishes have a date of birth included on the reporting

·   All item’s reported, like a traffic ticket, does not include an agreement to pay. These items will no be included.”

Many ask, why are these changes happening? According to the CFPB, the biggest consumer complaint is the inaccuracies on a persons credit report. There has been on FICO to make changes, therefore, they will now be putting the burden of proof on the creditors. The changes being made are not meant to hurt the creditors, but to make sure they are reporting accurate information.

-MTM