Some potential home buyers and mortgage applicants will be really happy when July 1, 2017 rolls around. That’s because they can expect to get a nice little boost in their credit scores.

Change in Policy

Many people don’t know about a policy shift that is about to happen for the big three national credit bureaus—TransUnion, Equifax and Experian. As of July 1, they will stop collecting and reporting certain financial data for consumers. This includes substantial amounts of civil judgment and tax lien information on public records. This potentially affects the credit scores of millions of Americans, an estimated 8 percent of consumers.

Civil judgments are debts owed by losing legal parties in civil cases. Tax liens are levied against the properties of those who are delinquent on tax payments. Both types of information in question have negative impacts on credit scores, so anyone with civil judgments and tax liens should see a slight boost (a projected average of 10 points) in their credit scores.

How it Affects Lenders

The flip side of this is that some lenders, landlords and others who depend on credit reports are concerned about this change in policy. Because less of the full picture will be shown on credit reports, they will have less information about the viability of loan candidates.

This change in policy has been rather under-the-radar and the three national credit bureaus have pretty quiet about the changes. Many mortgage lenders aren’t even aware of these new policies that will be going into effect in July. At Transparent Mortgage, we are well aware of how some of our customers’ credit scores may be impacted. Ultimately, it is just a small speed bump. It just means we have to be extra careful when reviewing loan applications and performing loan pre-approvals. This not only protects us, but it also protects our clients from qualifying for more than they can actually afford.

Protecting Your Best Interests

Whether you are buying a home or refinancing a home, you can count on Transparent Mortgage to be thorough and make sure your best interests are protected. Contact us today at (619) 929-0199 for more information about these credit score policy changes or to get started on your mortgage loan pre-approval.

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.