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Here’s Why Your Credit Score May Have Recently Gone Up

Credit Scores and credit reports play a vital role in the life of most Americans today. It determines the interest rates consumers pay for the credit card, mortgages and car loans and can ascertain if they qualify for a loan or not. 

Your credit report may get a makeover as the three big reporting agencies (Experian, Equifax, and TransUnion) are doing things a little differently and have started excluding certain items from your credit report that used to damage your credit. This comes in the wake of a study by the New York Federal Reserve which found problems with credit reporting. It has recommended some reforms to improve the accuracy of their credit reports and also remove some negative items so that it can help consumers’ improve their credit scores. Some of the changes that can boost your all-important three-digit credit scores are:

CREDIT SCORE

1. Tax Liens and Civil Judgments

Because of improved standards for utilizing new and existing public records, Experian, Equifax, and TransUnion have scraped most of the tax liens and civil judgments from consumer credit files in July 2017. Again in April this year, they went a step further by deciding to remove all tax liens from credit reports. Once this data is removed some credit scores can go up by as much as 30 points.

According to an estimate by LexisNexis Risk Solutions, about 11% population had a tax lien or judgment removed from their credit file. 

2. Collections

Credit Bureaus have also been removing certain collection accounts from credit reports under the terms of the National Credit Assistance Plan (NCAP). Since the new rules came into effect in June 2017 some eight million people had collection accounts completely removed from their credit reports, according to the New York Fed.

3. Medical Debt

The new rules will make it harder for medical debt to hurt your credit scores. Medical billing process can be complicated and confusing. To give time to resolve medical issues the three important credit bureaus have agreed to exclude medical bills on credit reports until they are at least 180 days due. Another plus is that unpaid medical bills that later get paid by your insurance should be removed from the credit bureau files so that it does not linger on and damage your score.

4. Fines and Tickets

 Due to the recent changes by NCAP, library fines, unpaid gym memberships or traffic tickets that have been lurking in your life will now be removed from your credit records and not damage your credit score.

As a result of these changes consumers are now witnessing a steady stream of changes which have boosted up their scores and according to the findings of New York Federal Reserve report the:  

  • Credit scores of consumers’ have gone up by 11 points on an average.
  • 18% of people saw credit scores go up by 30 points. In some cases, this increase was enough to make a difference between qualifying for a loan and getting it turned down.
  • About 8 million people had collection accounts completely removed from their credit reports after the second half of 2017.
  • The study also found $11 billion reductions in the total collection account balances.

According to Bruce McClary, Vice president of Communications at the National Foundation of Credit Counseling, “If anyone has experienced a jump in their credit scores due to these changes, they should take advantage of the momentum and work towards improving their credit health.”

If your credit score has also seen an increase, you could consider calling your credit card company and negotiate a lower interest rate. This can result in major savings.

The other financial moves you could consider with this better score is taking out a new loan for a mortgage, refinancing your car, getting a better credit card or checking insurance rates, said Kimberly Palmer, the personal finance expert at NerdWallet.  However, you should be strategic, she added.

It is important to note that because of the prevalence of reporting errors, FICO recommends that you should double-check your reports for inaccuracies that can hurt your score.  The recipe to keep your score moving and reaching a good score is that you should consistently pay your bills on time and keep your credit utilization low. You should also apply for credit only when needed and reduce the amount of debt you owe as much as possible.

The New Fico Score To Be Unveiled In 2019 Could Boost Your Credit Worthiness

For the past 27 years, FICO Credit Scores have been the
bedrock of most consumer- lending decisions in the US.
These scores were based mostly on consumers’ history of
paying mortgages, credit card balances and loans. The FICO
model has been periodically updated to help lenders to be
more informed about credit-granting decisions and help the
consumer get access to the credit they need. The most widely
used version is FICO Score 8.
The latest update is that Fair Isaac Corp. (the company
behind FICO) has decided to test out a new type of scores
called UltraFICO with credit reporting agency Experian and
a technology company called Finicity. This will be unveiled
early next year (2019) and will consider the borrowers’ bank-
account balance and cash-management behavior in addition
to the traditional credit.
The move to test the new scoring system comes in the wake
of some financial companies who are supplementing
traditional credit scores with an analysis of customer’s bank
account to assess consumer’s creditworthiness.

KEY FEATURES

Here are a few key features as to how it works and who could
benefit from the new UltraFICO scoring system.

  • The new FICO score will be optional and will be offered
    only to consumers who opt for it. They will be given the
    choice to do so when they do not qualify by the more
    traditional systems. However, they should also agree to
    share with the lender personal information, and allow
    them to access their banking and saving data to evaluate
    overall financial responsibility.
  • This new system will potentially improve the credit
    scores of many Americans who have less than stellar or
    borderline credit score ( upper 500 to the low 600s ) by
    20 points or more depending on the details of their
    financial profile.
  • “People who have strong credit scores need not consider
    UltraFICO scores but they could use it as a second
    chance,” says Sally TayloShoff Vice President of
    FICO.
  •  Consumers with an average bank-account of $400 and
    with no history of negative balances are more likely to
    benefit because it will take into account how old your
    bank-account is, the frequency of activity and evidence
    of saving.
  • It will particularly benefit millennials( people aged 18-
    34) who did not have the opportunity to build up a
    credit history. It will also help people who are in a
    financial rut and are rebuilding their credit scores.
  • It also might be easier for millions of Americans to get
    any type of loan including a mortgage loan-especially if
    they have a subprime credit score (500-600 FICO) or
    have little or no credit history at all. The new UltraFICO score has “definitely a lot of promise”
    as an alternative scoring method, provided the consumers
    have true control over what level of detail they share and
    whether to share information or not.
    However, it is not clear whether the other two credit bureaus
    Equifax and TransUnion will eventually participate in the
    Ultra FICO test. TransUnion in an email statement said that
    “it applauds all efforts that promote financial inclusion and
    expand economic opportunity” but Equifax did not comment
    on this.“According to Smith” The new scoring system is
    revolutionary as consumers will play a direct role, for the first
    time ever to determine their own credit scores.
    FOR CREDIT SCORE ENQUIRES CONTACTTOLL-FREE NO. (800) 400-ZINU(9468)

Credit Repair and the Procedure to Fix Bad Credit

Well a lot of people actually do not understand what exactly credit repair is. So, how can one deal with it? Dealing with credit repair may not seem to be an easy procedure, but in reality it is not that complicated too. Just read on to get a fair idea about how you can do so in the long run.

The first thing that you need is to get a Credit Report from any of the well known credit agencies like Experian, Equifax or TransUnion. You can get one from each if you want or can simply get one to see how your Credit Score looks like as of now. This is the basic thing that you need to do if you are thinking taking a professional help or want to do it yourself.

As soon as you get the report you are requested to read the report thoroughly. Consider this to be an important as it will give you a comprehensive inkling. You can actually find out which is rightly placed and which one has to be removed. Look for partial details, spelling errors and wrong credit history. Make sure you do this as well as this will only help you avoid unwanted credit on file. There is no need to mention that this will take some load off your report for sure.

The Easiest Way to Credit Repair

After all this the easiest way to credit repair is by starting to pay off your debts. Once you restart your payments, you can see the debts vanishing. No wonder this can take care of all that you have not been able to do in the past. Yes you need to keep one thing in your mind that this cannot happen overnight. You need to give it some time. Many people think that it is a matter of one day affair which is not at true. You need to have patience and let it take its time to repair the already damage credit.

Follow us here to learn more ways to improve your credit score.