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The major credit reporting agencies are being forced this summer to change some of their data collection policies, a move likely to buoy personal credit scores and give small business owners access to more business funding.

Because of a 2015 settlement with the New York Attorney General, the three major credit bureaus – Experian, Equifax and TransUnion – are altering some of their policies that will affect the credit scores of millions of Americans. Before the settlement, the big three agencies collected and included public records like parking tickets and other municipal fines. These types of data were factored into consumer credit reports.

Under the settlement rules, the credit bureaus will now only be allowed to include public records that list the consumer’s name, address, Social Security number and/or date of birth. Also, public records must be updated every 90 days or they cannot remain on the consumer credit reports.

The bureaus actually began implementing some credit reporting changes back in September 2015 and this last round of changes will start on July 1, 2017.

The new policies regarding public records could remove up to 96 percent of all civil judgments and 50 percent of tax liens that ae currently listed on Americans’ credit reports, according to the Consumer Data Industry Association. This is because those liens and judgment reports do not have enough of the newly required personal identifying information (PII).
Bankruptcy records do however already include all the needed information and will remain on consumer credit reports.

Although business credit scores are not likely to be directly affected by the changes, small business owners often use their personal credit scores to obtain business financing and working capital. A boost to their personal scores could mean a major rise in available funds for small business owners. Because of the credit bureau changes, there could be a significant rise in borrowing for businesses after this summer.


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