Some consumers may suddenly have a higher credit score.
That's because improved standards for utilizing new and existing public records were implemented on Saturday for the three major credit reporting companies. As part of this change, a majority of civil debts and tax liens are excluded, which means some credit scores will edge higher.
The new criteria come on the heels of a report by the Consumer Financial Protection Bureau that found problems with credit reporting companies and recommended changes to help consumers.
Altogether, about 7 percent of the population will have a judgment or lien removed from their credit file, according to a report by Fair Isaac. The company calculates and sells FICO scores, one of the most commonly used scores by lenders.
Once that information is stripped out, their numbers could rise by up to 20 points, Fair Isaac said.
On the other hand, "analyses conducted by the credit reporting agencies and credit score developers FICO and VantageScore show only modest credit scoring impacts," the Consumer Data Industry Association said in a statement. The association represents Equifax, Experian and TransUnion.
Credit reporting and scores play a key role in most Americans' daily life. The process can determine the interest rate a consumer is going to pay for credit cards, car loans and mortgages — or whether they will get a loan at all.