Millions of Americans could see their credit ratings improve in the coming weeks because of a new effort to remove potentially inaccurate information from their credit reports.

Beginning July 1, the major credit bureaus—Equifax, Experian, and TransUnion—will limit the use of many tax liens and most civil court judgments in the data used to calculate credit scores because of complaints that the data is often wrong and unfairly hurts consumers. The bureaus also will limit the use of overdue medical bills and eliminate other credit report items such as unpaid parking tickets. 

According to data broker LexisNexis, the new measures about tax liens and judgments will affect about 12 million Americans who currently have such information on their credit reports. Some of those people will see their FICO credit scores rise by as much as 40 points, although most will see more modest gains of 20 points or less.

The decision to restrict the use of civil judgments and tax liens in credit scores comes as the credit bureaus have fallen under pressure—from state attorneys general and the Consumer Financial Protection Bureau—to make credit reports more accurate and fair.

Maureen Mahoney, a policy analyst with Consumers Union, the policy and mobilization arm of Consumer Reports, says too few steps were being taken to ensure that judgments and tax liens were applied to the correct credit reports. Names got confused, addresses weren’t included, and Social Security numbers were omitted. 

The result is that some credit reports were unfairly blemished, which can stop a qualified person from being approved for a mortgage, a credit card, and even a job. 

Under the new standards, the major credit bureaus will include these public records only if they can be matched to a credit report with the consumer’s name, address, and date of birth or Social Security number—a standard that most public records do not meet. The information on those records will also need to be updated every 90 days to remain on the credit report.

Mahoney says that should help improve the accuracy of credit reports. She also advises that consumers check their credit reports next month to see whether such data has been removed, and if it hasn’t, contact the credit bureaus to find out why. If necessary, she says, you can also file a complaint with the Consumer Financial Protection Bureau.

To view your free credit report, download it at AnnualCreditReport.com

Give Your Credit Report a Checkup

Here are some of the recent and upcoming changes you should look for when you review your credit reports: 

Civil court judgments. If you’ve been sued by a lender or someone else you owe money to and the court ruled against you, your credit report probably includes a judgment, a black mark that can ding your credit score. Since most don’t include all the personal identifiers now required, practically all judgments should no longer appear on credit reports. 

Tax liens. The new rules also apply to tax liens. Even if a court record does have enough identifying information to be confidently matched to a credit report, the bureaus have promised to stop reporting that information unless data brokers send them fresh information about the record at least once every 90 days.

Medical collections. Starting in September, medical collections (seriously past-due bills) and other debt won’t appear on a person’s credit report until a 180-day waiting period has passed, to give the consumer time to straighten things out with the insurance company. This is because most medical bills are unavoidable and unpaid debt may not be a sign that a consumer can’t make his payments; the bills may simply be due to the length of time it takes the insurance company to make payment. The bureaus will also remove information about medical debt if an insurer has paid or is currently paying off the bills. 

Other nonlending collections. One other change the credit bureaus have made is that they no longer report items from collections agencies that don’t have anything to do with the repayment of borrowed money. That means information about things like unpaid parking tickets, library fines, and gym memberships should not appear on credit reports.