Higher credit scores will be easier to get thanks to new credit report rules. Here's why.

Life
ByJames Dennin

Thinking about getting a new credit card? You may want to wait until after July 1, when roughly 12 million Americans will see an automatic bump in their FICO credit score, a rating that influences the amount of interest you're likely to pay on a loan, and whether you'll get approved for an apartment — or a rewards-heavy credit card.

That's because the three major credit bureaus are removing a handful of negative factors from the reports, according to the Wall Street Journal. Those include tax liens, or legal claims over unpaid taxes, and civil judgments, or court rulings that resulted in you paying someone money: say, if someone borrowed your car and got in an accident — leaving you on the hook financially.

Why this credit score change could help you out financially

The boosts will still be less than 20 points for most people affected by the changes, the Journal reports, although some could see their score go up by as much as 40 points.

The adjustment will affect only about 6% of Americans with FICO credit scores, which typically range from 300 to 850. But 40 points can sometimes be the difference between getting approved for a new line of credit or not. And people with lower credit scores tend to be approved for credit cards with less generous rewards and loans that carry higher (aka more expensive) rates.

"Equifax, Experian and TransUnion continually seek ways to ensure the data they maintain on their consumer credit files is accurate and current," said Eric J. Ellman, interim president of the Consumer Data Industry Association, a trade-group representing the three credit bureaus. "We believe the enhanced standards for public records carefully balance the concerns of consumers and regulators about public record accuracy while at the same time ensuring that creditors can continue to rely on credit report data."

Why your credit score matters

Credit scores are used by the lending industry to help determine how risky a borrower is before deciding to spot them money in the form of a credit card or a mortgage or other type of loan.

What borrowers often don't realize is that they have several different credit scores at a given time, and that these numbers are always changing based on a variety of factors, including how many credit cards you have or how much money you've borrowed. 

Even if you're not one of the 12 million Americans who stands to be affected by the change, there's always a good reason to pay closer attention to your credit report: The Federal Trade Commission estimates that about one in five credit reports has a mistake in it. 

How to get your free credit report

While it's always good to keep an eye on your credit score and credit reports, it's also important to be careful about the companies you work with, since "free credit reports" with certain strings attached abound. One that doesn't come with strings is AnnualCreditReport.com: the legit, official site under federal law.

The three largest bureaus are all required to issue you a credit report for free at least once per year, meaning that you're entitled to a detailed, reputable credit check at least once every four months. 

If you haven't gotten one in a while — or ever — now's a good time to see how your credit rating stacks up. It's never too late to try to raise your score.

March. 13, 2017, 5:34 p.m. Eastern: This story has been updated.

Sign up for The Payoff — your weekly crash course on how to live your best financial life. Additionally, for all your burning money questions, check out Mic's  creditsavingscareerinvesting and health care hubs for more information — that pays off.