It is quite a relief after several years of carrying the burden of tax liens appearing on your credit report every time you need some financial assistance. This is because Experian, TransUnion, and Equifax—the three major credit bureaus no longer include tax liens in your credit reports. The change was implemented last April 16, making it a brand new policy, that could impact millions of Americans, especially small business owners who need stronger credit to apply for a business loan
TAX LIEN SEMINARS joined hands with our clients and subscribers in expressing our appreciation for this new development. Our sincere thanks also for launching the National Consumer Assistance Plan (NCAP) to implement industry-wide policy changes to make credit reports more accurate.
Credit Reports No Longer Include Tax Liens:
- Now that personal credit reports no longer include tax liens, this can help boost scores for anyone who needs help securing better financing products. The change, which can add potentially needed points on a credit score, could be big news for people seeking small business loansor business credit cards
- Since small business lendersand business credit card issuers—only want to work with the borrowers who can repay back their debt. Your credit score is a numerical track record of how well you’ve managed your financial obligations over the years. Those who’ve been hit with a tax lien will no longer need to worry about its impact on their individual credit scores.
The Impact of Tax Lien Removal From Your Credit Reports :
- Due to NCAP’s credit report adjustments lenders will no longer see tax liens on applicants’ credit reports, and the impact of a tax lien will no longer lower your credit score.
- According to LexisNexis Risk Solutions, only 11% of consumers have liens or civil judgments on their credit reports. The data also shows that removing liens and judgments results in an average increase of 10 points on credit scores. However, some credit scores might increase as much as 30 points.
- So, if you had a tax lien on your credit report, its removal may or may not increase your personal credit score enough to bump you up to the next credit score bracket. But if it does, that increase may be enough to qualify you for loans which you were unable to get approval before.
- Personal credit score is a huge factor in small business loan applications. So if your score jumps with your lien clearance , you can have more loan options.
- Even if you don’t have a lien removed from your credit report, this new policy change will impact the way lenders will assess your potential borrowing capacity.
Lenders cannot really establish your reputation as a borrower with any public records. The won’t know whether or not you are a good borrower. Basically, they have no way of knowing about your character. That’s precisely one reason why, lenders, in most cases tendto hike up their interest rates.
FINALLY, to be more comfortable with your business transactions, whether trying to secure a loan or getting approval for a property mortgage, Tax Lien Seminars suggests that if you had a previous tax lien on your credit score, you have to first check to see the exact impact of its removal. Assuming that you don’t have any tax lien, you may still experience the effect of the new credit reporting policy if and when a lender assigns you an interest rate on your future business loan.
