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A new retrospective on the removal of public records

Today the Consumer Financial Protection Bureau released the latest quarterly consumer credit trends report (qCCT), which is a retrospective on the removal of tax liens and civil judgments from credit reports that began July 2017. 

This new report follows the Bureau’s February 2018 qCCT report, which found that new reporting standards for public records resulted in the removal of all civil judgments and almost half of tax liens from consumer credit reports in July 2017. These reporting standards came from a provision in the National Consumer Assistance Plan (NCAP), launched in March 2015 in response to a settlement between the nationwide consumer reporting agencies (NCRAs) and over 30 State Attorneys General to remedy alleged Fair Credit Reporting Act violations.

This ninth qCCT report looks at the NCAP public records provision’s effects on the relationship between credit scores and consumers’ credit performance for consumers that had a civil judgment or tax lien removed from their credit report and those that did not.  

This report uses data from the Bureau’s Consumer Credit Panel (CCP), a longitudinal, nationally representative sample of approximately five million de-identified credit records maintained by one of the three nationwide consumer reporting agencies.  

Key findings include:

  • Since the February 2018 qCCT report, the NCRAs have taken further steps to remove public records.  Almost half of tax liens survived the July 2017 removals, but by April 2018, none remained.  Bankruptcies are now the only type of public record on NCRA credit reports.
  • Consumers with public records tended to have lower scores than those without. In June 2017 (before NCAP’s changes took effect), half of consumers with judgments or liens had Deep Subprime scores (below 580).
  • Consumers with judgments or liens had a much higher overall delinquency rate than those without, but this difference is smaller when looking at consumers in the same credit score group. 
  • Looking within credit score categories, the difference in delinquency rates between consumers with judgments or liens and those without stays largely constant across time periods. This evidence suggests that the public records provision of the NCAP did not have a large effect on the relationship between credit scores and consumers’ credit performance.

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