Credit Score Overhaul Is Good For The Real Estate Industry

From an article by Jameson Doris, which we link to later, there are new changes to credit scores which are beneficial to home buyers. Millions of potential home buyers could now have easier access to mortgages, following a change to the way the three largest U.S. credit reporting firms handle negative credit events.

What Is The Credit Score Change

That change is the National Consumer Assistance Plan (NCAP). Launched by Equifax, Experian and TransUnion, the plan sets forth the goal of making credit reports more accurate for consumers and makes it easier for them to correct any errors they may find on their credit reports.

Bad Credit Removed For Potential Home Buyers

Between June 2017, when the plan went into effect, and June 2018, collections were removed from eight million consumers’ credit reports, which resulted in an average increase of 14 points to their scores, according to a recently released Federal Reserve Bank of New York report.

NCAP removes “from credit reports any previously reported medical collections that have been paid or are being paid by insurance,” according to the plan’s site.

It also requires debt collectors to not only “include original creditor information with each account being reported for collection,” but to “regularly update the status of unpaid debts and remove debts no longer being pursued for collection,” as well.

At the same time, the total U.S. household debt has risen for a 16th straight month, to $13.3 trillion, according to the New York Fed’s Quarterly Report on Household Debt and Credit. Generally, confidence is connected to consumers’ financial picture, including borrowing, and when debt grows, demand for housing often rises in tandem. For more on this story click here

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