Many people have experienced hassles when trying to fix errors on their credit report. These errors can significantly impact your credit score and make it harder and more expensive for you to buy a home, open a new line of credit or even to get certain jobs and insurance policies. But, in the wake of a multi-state investigation, the three major credit reporting agencies have agreed to improve the way they handle credit report error sand disputes and reporting of medical debt.
TransUnion, Experian and Equifax were the subject of an investigation that started in 2012 and spanned 31 states. Investigators looked into the way that they handled report resolution and consumer disputes, the accuracy of the reports that they issued and the way that they marketed paid-for services like credit monitoring to people who contacted them to dispute their reports. The investigation culminated in an agreement earlier this year that will change the way that they handle errors and medical debt and also require them to be more proactive when resolving disputes over information on credit reports.
Changes in Report Resolution Process
The changes will go into effect nationally over the next six to 39 months. Among the changes that consumers can expect:
- Reviews from trained employees. When people submit documentation that there is an error in a report, employees at the reporting agencies will now be required to investigate and resolve disputes.
- Different handling of medical debt. About 43 million Americans have past-due medical debt on their credit reports. Under the new rules, medical debt will not be reported until after a 180 day waiting period. This gives insurers time to apply payments and consumers time to deal with debt that their health plans don’t cover. In addition, medical collections that have been, or are being paid by the insurance, will be removed from the credit report.
- A database of bad data furnishers. A list of creditors that have made erroneous or false reports will be maintained by all three agencies. They will be required to give this information to states upon request.
- No marketing during phone calls. When a consumer calls to dispute an entry on a credit report, the agencies will not be allowed to market services like credit monitoring until after the dispute part of the call has ended. Additionally, they will be required to tell customers that they are not required to buy a product to dispute a report.
- A better, more detailed system. Under the new system, it will be easier to share data.
- A clearer escalation process. When someone is dealing with a complex problem such as identity theft, fraud or mixed up files, there will be a process to escalate the issue and handle the resolution.
- Information about mixed files. When one person’s information winds up on another person’s report, the agency that discovers it must inform the other two.
- Shared documents. When someone disputes an entry on their report, the agencies will now have to provide the documents to the creditor that initially filed the entry.
- More credit reports. Now, if someone disputes an entry and a change is made, they can get another free report.
Between these changes, it is hope that people will have an easier time with credit repair and will be more empowered to handle financial and credit issues. By making it easier for people to control what goes on their credit reports, officials hope to make it easier for people to get financial opportunities and increase their financial success.