How To Stay Ahead Of The Game While Credit Scores Evolve
It seems that in order to live the American dream, you need to be super rich or gave a great credit score. Most people have ups and downs with their finances over their lives. This can lead to a less-than-perfect credit score that can be difficult to fix. It can seem hopeless to try and get that low-interest car loan or get approval from the mortgage lender for the dream home you are looking to purchase. However, many people speculate that the way our credit is scored might be changing in the future. To be able to stay ahead of the credit game, we need learn what the changes are going to be and how to keep up.
Changes Already Happening
Last year saw major changes in how credit scores are calculated by the top reporting credit bureaus. These changes have already affected millions across the country and many people saw an increase in their scores because of many judgments and tax liens being deleted off of their credit reports.
Last September, the top bureaus also changed how medical debts get reported on people’s credit reports as well. They will now remove it from your report permanently once the debt has been paid in full. Additionally, they are now adding a waiting period of at least six months before a medical debt can even be added to a credit report. These changes alone have had a good impact on so many people and their credit scores.
Many financial experts are predicting that more changes to the way credit scores are calculated will take place in the following few years. Below are a few of the top predictions that most are making and how they can affect most people’s credit scores in their files.
Monitoring Your Credit Will Be More Important
In 2017, hackers got into Equifax and breached their customer’s data. There was a serious fallout from this breach that has had a huge impact on the way that consumers monitor their credit files. Millions of Americans found that the breach cost them a lot and put their information at risk. The cyber thieves stole personal information from people’s files such as their addresses, Social Security numbers other valuable and personal information.
This breach has caused many people to begin monitoring their credit and personal information much closer than before. It is likely that the breach will have an impact for those that had their information stolen for years to come. It is certain that the thieves will be using some of the information they took for ill purposes in the near future. This has millions of people concerned at what that could mean for them.
Credit Score Alternative
Another prediction is that there will be a growing trend where there is going to be more credit score alternatives to use. This trend has already been used often in the area of utility and rent payments. The future sees this trend growing as companies who do credit scoring will be looking for other ways in which to calculate a person’s loan risks.
More Regulations Coming For Credit Reporting
Lastly, there is a prediction that there will soon be more regulation as to how credit reporting companies will be able to calculate how risk is determined. These companies are not able to use any factors when calculating a person’s risk that is not predictive. This can include some factors such as gender, race and age.