In 2017, several major credit reporting agencies announced a plan to overhaul how negative information is handled on credit reports. Up to 8 million American consumers unknowingly enjoyed the benefits of this unexpected change, and saw their credit scores jump by up to 40 points. According to the New York Federal Reserve, consumers experienced an 11-point increase, on average, if they had at least one collections account removed from their reports. The vast majority of people who will benefit from the revision are those who had scores of 660 or lower.
A credit score is a measure of a consumer’s “trustworthiness” for banking purposes. Whenever he or she seeks a loan or a mortgage, the financial institute checks this score, which ranges from 300 to 850. Better scores help the borrower qualify for better interest rates and cheaper mortgage rates, while lower scores often result in credit rejection.
Credit scores, however, have always been prone to errors which have unfairly prevented many consumers from obtaining a loan. Even with this overhaul many consumers still have errors on their reports. These errors often lower your score and result in credit denials.
The impact of a credit score boost will be significant for most borrowers across America. According to a recent study from LendingTree, raising a consumer’s credit score from “fair” (580-669) to “very good” (740-799) could lower mortgage interest costs by almost $30,000 on average.
If you have any questions regarding errors on your credit reports, please contact Boss Law for a FREE review of your credit report.
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