The three major credit reporting agencies, Transunion, Equifax, and Experian, have made a decision to exclude tax liens and collection lawsuit judgments from their credit reports. This is expected to increase credit scores by more than 40 points for three quarters of a million people and by less than 20 points for about 11 million.
This may make creditors more likely to extend credit. The information is still available of course – such things are a matter of public record. However, excluding it from the credit reports will make sure information more costly to obtain. Furthermore, for major credit cards, it will probably never show up on their radar unless they change their internal procedures to include other credit reports that are not associated with the big three.
The changes may increase the risks creditors take, since those with judgments are twice as likely to default on a loan. Although most people have some sort of inaccurate information on their credit reports, statistics are inconclusive as to how much of the inaccuracies actually effect credit-worthiness. Much of this has been probably the result of lawsuits filed by the New York attorney general.