Credit Report Change

The three largest credit reporting agencies, Equifax, Experian and TransUnion will change the way they report medical collections, handle errors and resolve disputes. These changes will be implemented over the next 3 years.

The new agreement calls for reforms covering some of the most commonly expressed complaints from consumers about the credit reporting process including accuracy, the fairness and efficacy of complaint resolutions, and the harm done to credit histories due to medical debt.

• Improving the Dispute Resolution Process. Rather than relying as they do entirely in some cases on a fully automated complaint resolution process, the agreement requires that the CRAs have specially trained employees review all documentation submitted by consumers claiming that incorrect information belonging to other consumers has been mixed into their files or that they are the victim of fraud or identify theft. Even in cases where an automated dispute resolution system is employed a CRA employee must review the supporting documentation.

• Medical Debt. Medical debt constitutes over half of all collection items on credit reports and often results from insurance-coverage delays or disputes. Under the new agreement CRAs must institute a 180-day waiting period before medical debt is included in a credit report. In addition, while delinquencies ordinarily remain on credit reports even after a debt has been paid, the CRAs will remove all medical debts from a consumer's credit report once the debt is paid by insurance.

• Increasing Visibility and Frequency of Free Credit Reports. While current federal law provides consumers with the right to receive one free credit report a year from each of the three major CRAs, many are not aware of that fact. The agreement requires the CRAs to include a prominently-labeled hyperlink to the AnnualCreditReport.com website on the CRAs' homepages. Consumers will also now be entitled to receive a second free report each year if they successfully dispute an item on their report in order to verify the accuracy of the correction.

• Furnisher Monitoring. The Attorney General's agreement requires the three CRAs to create a National Credit Reporting Working Group that will develop a set of best practices and policies to enhance the CRAs' furnisher monitoring and data accuracy. This group will develop metrics for analyzing furnisher data, including: the number of disputes related to particular furnishers or categories of furnishers; furnishers' rate of response to disputes; and dispute outcomes. Each CRA will implement policies to monitor furnishers' performance and take corrective action against furnishers that fail to comply with their obligations.


**Swanson, Jann: Major Changes Coming for Credit Reporting:[http://www.mortgagenewsdaily.com/03102015_credit_reports_agencies.asp]:[March 10, 2015]