Recent changes in how the 3 major credit bureaus calculate FICO could indicate an increase in lending and spending for many consumers. Lenders should be getting ready to retain, acquire, and put in some work!
Credit reports are often confusing for consumers who are trying to arrange their financial affairs ahead of a big purchase. It is important for consumers to keep up with policy changes as they relate to the FCRA (Fair Credit Reporting Act). The three major credit bureaus (Experian, TransUnion, & Equifax) recently complied with a request made by a group of state attorney generals that will affect the way consumer credit reports are measured by lenders.
Civil judgments and tax liens have often been incorrect or compiled from incomplete data when they appeared on credit reports in the past. Consumers have worked tirelessly, often to no avail, in order to get these portions of their reports corrected. These inaccuracies have resulted in an average 20+ point deduction on consumer FICO scores.
The settlement that took place in late June established a protocol for the handling of incomplete consumer data. Any data that is incomplete, or shows signs of inaccuracies is required to now be left off of consumer’s credit reports. This change could result in a major boost for credit scores across the nation. This could, in turn, result in an uptick in purchasing. As always, it is important to educate consumers on their credit so that they know what they can and cannot afford. Firm offers of credit will be on the rise with this change in regulation by the bureaus. Audience targeting and customer retention are more important than ever for marketers that want to get in front of the right people, at the right time, with the right offer.
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