Why your credit score could soon get bumped up

Credit scores can help determine how much you pay for a house or car, or even whether you need to put a deposit down on utilities. They definitely impact your rate on any type of Business Funding.

So it comes as good news for millions of Americans that they may find their credit-score getting a boost later this year. That’s because the three major credit-reporting agencies are changing their standards for two pieces of negative information: tax liens and civil judgments. Either event has led to a lower credit score in the past, so the change is projected to increase the credit scores of roughly 12 million consumers, according to an analysis from FICO.

The change comes as the credit-reporting agencies -- TransUnion, Experian and Equifax -- have come under pressure from lawmakers and consumer advocates to tighten their policies and fix errors on consumers’ reports. In 2015, the three agencies settled with 31 states over errors, agreeing to take steps to make it easier for consumers to fix mistakes on their reports.

Given that credit scores are the basis of many business decisions today, it’s a win for Business owners. Civil judgments can include those from collection firms that have brought unpaid debts to court.