Whether or not you noticed it, there were some pretty major changes during 2018 that affect credit reporting, and some of those things might ultimately impact your credit score. Mr. Cooper covers the latest changes in credit reporting so that homeowners know what changes mean to them, as well as why credit scores might have changed. Here’s what you need to know about credit in the year 2019.
Credit Freezes are Now Free for Everyone
Beginning September 21, 2018, all Americans can freeze their credit reports for free. Parents and guardians can also request a free freeze for their children. This is a major change made on the heels of the Equifax data breach in 2017.
- Previously, you had to confirm that you were the victim of identity theft or fraud with an Identity Theft Report or police report in order to get a free credit freeze. Otherwise, each of the credit bureaus charged a small fee to freeze it (depending on which state you live in).
- These days, all you will need to contact each of the three major credit reporting agencies separately to freeze each of the reports (Equifax, Experian, and Transunion).
A credit freeze can be an effective way to prevent an identity thief from obtaining credit in your name, but you will need to unfreeze your credit before you try to apply for a mortgage, get a car loan, or open a new credit card account. Temporarily lifting a credit freeze is also now free, and consumers are also now able to re-freeze their credit after they complete the process of getting new credit.
As part of this change, consumers can also get a fraud alert — essentially a flag on your credit report that lets creditors know you’ve been the victim of identity theft — put on their credit report for one year (in the past, it stayed only for 90 days). A fraud alert lets lenders know to check with you before extending credit or opening a loan in your name.
What hasn’t changed is that you can still get a free copy of your credit report from each of the credit bureaus at AnnualCreditReport.com. It’s a good idea to check your credit report regularly to know where you stand so that you’re prepared when you need to make a big purchase, like buying a house or a car. It’s also wise to check your credit report regularly so that you can stay on the lookout for red flags that could indicate you’ve been a victim of identity theft.
Tax Liens Were Removed from Credit Reports
Beginning on April 16, 2018, all three credit bureaus removed tax liens from credit reports. Previously, tax liens appeared on credit reports and could have caused a consumer’s credit score to drop. Any U.S. consumers who had tax liens likely saw their credit scores benefit in the spring after that update was made.
Credit is an important factor in buying or refinancing your home. Click here to read more articles about credit from Mr. Cooper.