Potentially good news for consumers

The nation’s three largest credit-reporting agencies will soon exclude tax liens and some civil debts from their reports.

The change by Equifax, Experian and TransUnion will take effect July 1, as part of a plan to ensure that consumer identifications in the data are accurate and current, the Consumer Data Industry Association, a trade association for the companies, said Monday.

In a revision that could improve consumers’ credit scores, the credit agencies will exclude the tax liens and civil debts if reports on those obligations don’t include a consumers’ names and addresses, as well as Social Security numbers and or dates of birth, the CDIA said. Many liens and most judgments don’t include all of that data, in part because Social Security numbers are often redacted for security reasons.

Additionally, the records won’t be included without courthouse visits to obtain newly filed and updated public records at least every 90 days.Although the changes could help consumers appear more credit-worthy, the updated policies potentially could make loan-screening more difficult for lenders. Nessa Feddis, senior vice president for consumer protection and payments at the American Bankers Association, said the change could mean less precise lending data for bankers, as well as potential problems for all consumers.