Millions of People’s Credit Scores May Get a Bump This Summer

The three biggest credit monitoring companies in the country are making a change to the way they calculate credit scores, in a move that could benefit millions of people. 

Starting in July, Experian, Equifax, and TransUnion will no longer consider outstanding tax liens or civil judgments when calculating credit scores. The announcement comes on the heels of a brief from the Consumer Financial Protection Bureau (CFPB) outlining problems in the credit reporting industry. Chief among them: inaccuracies, often to the detriment of consumers’ credit scores. The Wall Street Journal reports that 8 million complaints of inaccuracy were filed against the three top companies in 2011 alone.

"Since we began our oversight work, the CFPB has been uncovering and correcting problems in the consumer reporting industry," CFPB director Richard Cordray said in a statement. "Much more work needs to be done but our corrective actions are leading to positive changes that are benefiting consumers all over the country."

Not sure if this affects you? Then it probably doesn't. A tax lien is what happens when you fail to pay taxes and the IRS makes a legal claim on your property. A civil judgment is just what it sounds like: A judge has ruled against you in a civil case. If either of these things has happened, you’re likely already aware of it.

Not all tax liens and judgments will be erased; the credit report companies say they will only ignore those that are missing information (such as your name, social security number, or address). But FICO, the analytics firm that created the credit score system, says that many entries are incomplete, and that as many as 11 million people might see a modest bump in their scores this summer.