Fixing Credit Report Errors is Now Easier
Credit Reporting Agencies Agree to Consumer-Friendly Changes
Last Updated: February 14, 2016
As we have stated in so many of our articles, the first step to fixing your credit is obtaining your credit reports. There are 3 main credit reporting bureaus, Experian, Equifax, TransUnion, and you need to obtain a report from each one of these agencies before you start the credit repair process. Another reason to obtain your credit reports is to help prevent fraud and mistakes on your credit history, which can cripple your ability to borrow money. We recommend obtaining your credit reports once a year, at the very least, so you can fix any errors you find immediately before they do a lot of damage to your credit score.
But fixing these errors has not always been easy and dealing with the credit bureaus can sometimes be downright frustrating and exasperating until now - good news is on the horizon!
Consumer-Friendly Business Practice Reform
According to a recent article by Mark Huffman found in the "Consumer Affairs" publication, attorney generals from 31 states have reached a settlement with Experian, Equifax, and TransUnion to implement a broad list of consumer-friendly reforms. In addition, these companies will pay the states $6 million. The states who are all on board with this agreement are: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, and Wisconsin.
The changes include providing better protections for consumers who find errors on their credit reports, limiting when medical debts can be placed on a consumer's credit reports, and establishing specific protocols for victims of identity theft who find fraudulent accounts and debts in their name.
This reform comes as a response to mounting complaints from consumers against these credit reporting agencies and addresses how they compile and maintain consumer data and how they investigate and handle consumer complaints. A probe into these complaints showed there was a lot of room for improvement.
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How Will These Changes Help Consumers?
As a result of the investigation launched by the above listed 31 states, the three credit reporting agencies will increase transparency and accuracy of credit reports to the benefit of consumers. According to a press release from the Illinois Attorney General's Office, provisions of the settlement are as follows:
Holding Data Furnishers to a Higher Standard
- Provides an escalated process for handling complicated disputes, such as those involving identity theft, fraud or mixed files, which is when one consumer’s information is mixed with another.
- Requires each credit reporting agency to notify the other agencies if it finds a mixed file.
- Requires the credit reporting agencies to send a consumer’s supporting documents to the data furnisher.
- Allows consumers to obtain one additional free credit report in a 12-month period if they dispute information on their credit report and a change is made to the report as a result of the dispute.
Limiting Certain Information that can be Added to a Consumer's Credit Report
- Generally prohibits fines and tickets from being added to credit reports.
- Requires that medical debt cannot be placed on a credit report until 180 days after the account is reported to the credit reporting agency to allow consumers time to work out issues with their insurance companies.
- Requires debt collectors to provide the original creditor’s name and information about the debt in order for the debt information to be added to a credit report.
Requiring Additional Consumer Education
- Requires credit reporting agencies to tell consumers how they can further report problems about the outcome of an investigation into a dispute, such as filing a complaint with other agencies.
- Requires the website www.annualcreditreport.com to contain links to each credit reporting agency’s dispute website and prohibits ads from appearing on that site.
Better Credit Report Control for Consumers
"Credit reports can be very useful, but when they are inaccurate, they can disrupt and damage the lives of hardworking families," said Maryland Attorney General Brian Frosh. "This settlement helps ensure more accurate credit reporting and provides consumers greater control over the financial records that are compiled by the credit reporting agencies."
The changes required under the settlement will be implemented in three phases to allow the credit reporting agencies to update their IT systems and procedures with data furnishers. All changes must be completed by three years and 90 days following the settlement’s effective date. Good news for consumers, indeed!