Credit reporting and credit scores have long been an area where the banks and reporting agencies held all the cards. Until fairly recently, FICO scores were closely guarded secrets. Errors on reports could easily keep you from qualifying for credit. And, it was difficult to dispute charges that marred your reports. But, a new agreement with the Attorney General’s Office in New York is leading the way toward fairer credit reporting practices.
An Easier Dispute Process
Roughly 10 million American consumers have been denied credit or been subject to higher interest rates because of errors that dragged down their credit scores. That’s about 5% of all US consumers who have credit reports. But, as part of their deal with the Attorney General, the three major credit reporting agencies are going to make it easier for individuals to report problems with their credit reports.
No Medical Debt for 180 Days
Millions of Americans have negative marks on their credit report because of debts from medical procedures and New Credit Reform. The new rules will increase the amount of time that must pass before you can be reported for an unpaid medical bill. The increased lead time will give you, your doctors and your insurers more time to negotiate payment without the risk of ruining your credit. You will have time to work with your insurer to find out what they cover and to make payment arrangements for what you must pay out of pocket. Combined with rules from last year that remove paid medical debts, this can make a significant positive different in many people’s credit scores.
Additionally, unpaid parking tickets, library fees and other small fines will no longer have the power to tank your credit rating. Debts that are not the result of contracts will no longer be allowed to appear on your credit report.
Disputes Reviewed by Humans
In the past, many credit disputes were automatically declined because they were handled by automated systems. Even if you legitimately did not owe a debt, the reporting agencies would decline to remove the black mark without thorough investigation. Under the new reforms, trained personnel will have to manually review the documentation for every credit report dispute. This provides a more nuanced process and reduces the risk of debts improperly left on people’s credit reports.
The changes will not appear overnight. Estimates show that it will be between 6 and 36 months for all of the reforms to go through. Plus, even with the changes, it will still be necessary to take steps like regularly viewing your credit report for errors or forgotten debts. In the meantime, let Key Credit Repair help you navigate this complex system and help you attain the home ownership opportunities you deserve. Feel free to contact our office at 617-265-7900, or schedule a free consultation below.