According to an article published by CNBC contributor Jessica Dickler, consumers may see higher credit scores if improved standards are implemented on July 1.
Equifax, Experian and Transunion are continually seeking ways to ensure they maintain accurate and current information, but the number one consumer complaint is that information is inaccurate, and the time it takes to update it is too lengthy. Changes will include improved standards, removal and updating of some civil debts and tax liens and stricter identity-matching criteria. The CNBC article states these changes could boost an estimated 12 million consumers’ FICO scores by up to 40 points or more, according to statistics provided by the Wall Street Journal.
These new standards could mean the difference in consumers’ ability to not only obtain a loan, but get more preferable rates on such loans.
What Does My Credit Score Mean?
Your credit score is an important factor in your daily life. The score is calculated by looking at your payment history and how timely you are at repaying your debts. Next it looks at how much debt you have. It will also evaluate the length of your credit history, the types of credit you have and any new credit.
A credit score above 740 is considered excellent, 680-740 is good credit and 620-680 is acceptable. Credit.org has a valuable infographic to better understand the credit score levels.
Your credit score determines the interest rate that you will have on your loans as well as if you will even be approved for the loan at all. The difference of 40 points can make a huge difference for the borrower. According to the CNBC article, if the issues with the reporting is addressed and rectified, it could result in billions of dollars in benefits for the consumer.
Jessica Dickler states in her article that, “The CFPB has come under fire by the Trump Administration with the White House and congressional Republicans exploring ways to fire CFPB Director Richard Cordray if not abolish the office altogether.”
The Consumer Financial Protection Bureau is credited with providing the supervision and attention that has resulted in the 3 largest credit score reporting agencies evaluating how they do things. The loss of this office or Cordray as the director would like result in this work in progress being “stopped dead in its tracks.”
If your credit score is holding you back from applying for a mortgage, don’t wait. You can start making changes to improve your credit score immediately. When you’re ready to apply for a home loan, contact one of the experienced loan officers at Title Mortgage today. We pride ourselves on offering a variety of loan programs to better meet the needs of all of our customers.