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Major credit bureaus agree to overhaul dispute process

On Mar. 9, 2015 the three major credit reporting agencies — Experian, Equifax and TransUnion agreed to revise the dispute process and reporting methods for unpaid medical bills as part of a comprehensive overhaul in the industry.

After more than a year of talks between the credit reporting agencies and NY Attorney General Eric Schneiderman, a settlement has been reached. Attorney General Schneiderman’s office began investigating the credit bureaus’ practices in 2012 after receiving complaints from New York residents about credit errors and the dispute process to correct those errors.

A nationwide deal was reached rather than having two systems for reporting, one in New York and the other for the rest of the country. It makes perfect sense because if New York residents experience problems with correcting errors it follows that consumers across the country are experiencing similar issues.

The changes will take some time to implement and the credit reporting agencies have three years to complete them in full. They have coined a program called “National Consumer Assistance Plan” that will provide consumers more transparency when dealing with credit bureaus.

Here is what the National Consumer Assistance Plan will focus on:

  • Consumers getting free credit reports from www.annualcreditreport.com will get access to additional educational material.
  • Consumers disputing information based on their credit reports from www.annualcreditreport.com will be able to obtain an additional free annual report, without waiting a year, if a modification was made as a result of a dispute.
  • Consumers who dispute items on their credit reports will receive additional information from the credit bureaus along with the results of their dispute, including a description of what they can do if they are not satisfied with the outcome of their dispute.
  • Victims of identity theft, fraud or file mixing will get access to an enhanced dispute resolution process from the credit reporting agencies.
  • Medical debts won't be reported until after a 180-day “waiting period” to allow insurance payments to be applied. The credit reporting agencies will also remove from credit reports previously reported medical collections that have been or are being paid by insurance.
  • Data furnishers (anyone who reports to your credit report) will be subject to consistent standards and the credit bureaus will reinforce those standards.
  • Data furnishers will be prohibited from reporting authorized users without a date of birth and the credit reporting agencies will reject data that does not comply with this requirement.
  • The credit reporting agencies will eliminate the reporting of debts that did not arise from a contract or agreement by the consumer to pay, such as tickets or fines.
  • The credit reporting agencies have agreed to employ specially trained personnel to review disputes and supporting documentation, in effect giving consumers the ability to challenge what is now an automated dispute process. This group will help ensure consistency and uniformity.

Changing the credit report dispute process is good news for consumers. It is often a challenging and frustrating process for consumers to get a fair resolution from credit reporting agencies.

Many consumers end up paying more in interest, receiving less favorable terms and even getting outright denied for credit, a job or housing based on inaccurate credit reports. This overhaul will address the biggest consumer complaints of not being able to correct inaccurate credit reports.

New York Attorney General Eric Schneiderman said, “The credit reporting system in America that we’re addressing today suffers from inaccuracy and, oftentimes, outright injustice.”

Because the changes will not occur overnight, consumers should remain on the lookout over the next 36 months for the various changes in the credit reporting agencies. Changes may roll out at different times for the three major credit reporting agencies, and consumers must seek information from each bureau on how they’re taking action.

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