Starting in July, credit reports produced by the three major reporting firms (Equifax Inc., Experian PLC and TransUnion) will exclude information on most tax liens and civil judgments, boosting credit scores for potentially millions of Americans but, at the same time, increasing potential risks for lenders, according to The Wall Street Journal. Tax liens and civil judgments will only be factored into credit scores when they include a person's name, address, and either a social security number or birthday. Very few includes all of these details. The changes will apply not only to new tax liens and civil judgments but to existing ones as well.

The companies decided to make this change in response to regulatory concerns over inaccurate data. The Journal said that one in five consumers has an error in at least one of their three major credit reports, and over eight million people per year dispute the information on their credit reports. The three companies have already been forced to settle with attorneys general in 31 states over record keeping errors in the past two years.

While the changes will indeed improve millions of people's credit scores, the Journal said the increases will be relatively modest. A little under 11 million people will have raises of less than 20 points, though about 700,000 consumers will see a rise of at least 40 points. However the Journal also pointed out that this means loans will be a little riskier, as those with tax liens on their record have been shown to be twice as likely to default. However while this information will be scrubbed from credit reports, lenders can still find it in public records.