Black marks fall off credit reports in July

Starting July 1, the credit scores of up to 14 million people could begin to rise as credit reports are scrubbed of nearly all civil judgments and many tax liens.

Consumer advocates hail the data’s deletion as a long-overdue victory for people whose scores were unfairly dinged by inaccurate information. Others worry the changes could inflate the scores of risky borrowers and have a catastrophic impact on lenders.

People shouldn’t expect an immediate jump in their scores, however.

In my latest for the Associated Press, how the process will work and when you can expect to see changes.

Thursday’s need-to-know money news

debt collectorsToday’s top story: How a single missed student loan payment can damage your credit. Also in the news: Finding a financial advisor who won’t rip you off, how tax liens can affect a spouse’s credit, and seven fall budget moves you need to make before the holidays begin.

Most Students Don’t Get How Bad It Is to Miss Loan Payments
A single missed payment could take a severe bite out of your credit score.

How to Hire a Financial Advisor Who Won’t Rip You Off
Due diligence is key.

Life Insurance Agents and Commissions: What You Should Know
Beware the sales pitch.

How Tax Liens Affect a Spouse’s Credit
Community property states mean trouble for both credit scores.

7 Fall Budget Moves You Need to Make Now
Get busy before the holidays.

News you can use right now

Here’s a round-up of good recent stories tied to Tax Day (deadline’s tomorrow) and one of my favorite topics, credit scores.

Can’t pay? Amy Feldman’s article “What if you can’t pay your taxes?” for Reuters walks you through what to do if you’re facing a big bill, rather than a refund. Bottom line: don’t ignore the problem.

Tax liens and credit scores. The IRS has many ways to make your life miserable if you don’t pay your taxes. One weapon used by the IRS and other tax authorities is the tax lien, which can trash your credit scores and which is one of the few negative items that can show up on your credit report indefinitely if you fail to pay. Learn more from Tom Quinn’s column “Not paying your taxes can hurt your credit score” on Credit.com.

Plan to buy a car with your refund? If you’re one of the many getting money back from Uncle Sam and considering using it to buy another car, beware. Dealers know you’re coming, and you don’t want to have a big red target on your back. “Dealers are well aware that buyers may suddenly have an influx of cash on hand this time of year, so it’s not uncommon to see promotions and offers tied to tax season,” says Carroll Lachnit, Consumer Advice Editor at Edmunds.com. “And while there are good deals to be had on new cars, we strongly encourage consumers to take advantage of every research tool at their disposal before they plunk down their refunds as down payments.” For more, read Edmunds.com’s “Do your research before spending tax refund dollars at the car dealership.”

Good credit scores and a fat down payment may not be enough. You’ve heard that it’s harder to get mortgage these days, but you might be surprised at how much harder it is. Real estate columnist Kenneth Harney details the average FICO scores, down payments and debt-to-income ratios of those who did and didn’t get a mortgage in February. Most shocking: the group that got turned down had numbers that would have made them great candidates for loans just a few years ago.

Unexpected ways to better your numbers. Speaking of credit scores, Daniel Bortz wrote “6 surprising ways to boost your credit score” for U.S. News. I’m quoted, along with Beverly Herzog of Credit.com, Bill Hardekopf of LowCards.com and Anthony Sprauve of FICO.