Credit-reporting settlement: the bar is raised
The three big credit bureaus have reached a settlement with New York’s attorney general Eric Schneiderman. The settlement overhauls how credit bureaus will handle errors on credit reports and medical debts.
TransUnion, Experian, and Equifax collect data and maintain credit reports on more than 200 million Americans. The data is used to create credit scores which can determine who gets a loan and how much interest is paid on it. An error on a credit report can result in lower credit scores, making it harder for consumers to get financing. Credit reports with negative information can also become an obstacle for those trying to rent an apartment, getting a car loan and mortgage, or even finding a job.
Now the three credit bureaus are making changes that will improve credit report accuracy, increase the efficacy of error dispute procedures, and protect consumers from unfair harm to their credit histories due to medical debt. Most of the changes will apply nationwide and will go into effect over the next 6 months to 39 months.
Here are the changes which will affect consumers.
Improvement of dispute process
Consumers will have more protections when they find an error on their credit reports. The settlement requires the credit bureaus to employ specially trained employees to review the documentation submitted by consumers for all disputes. Consumers who find errors should submit an exhaustive documentation to prove the information on their reports is inaccurate.
Most of collection items on credit reports are medical debts. The complexity of medical billing and insurance often results in medical debts that end up on credit reports. Therefore, medical debt may not accurately reflect consumers’ creditworthiness.
The settlement requires the credit bureaus to wait 180 days before medical debt will be added on a credit report. This can be enough for consumers to resolve the delinquencies that result from insurance delays or disputes. In addition, the medical debts will be removed from a consumers’ credit report after the debt is paid by insurance.
Additional free credit report
It is a well known fact that consumers can check their credit reports for free from each of the three credit bureaus once a year at AnnualCreditReport.com. Now the agreement requires the credit bureaus to provide a second free credit report to consumers who are involved in disputes and have a change made to their credit reports. This will allow consumers to confirm if the correction to their credit reports was made.
These are the biggest changes to the credit reporting system since the 2003 Fair Credit Reporting Act, which gives the right to consumers to get a free annual credit report and outlined a dispute process to correct errors.
Latest Other Card News
Yesterday, on October 28, Uber introduced their new team – Uber Money. According to the official website, it is supposed to work on financial products and technologies to let their customers access, manage, and grow money easier and faster. Uber is expected to develop several new features, as well as make enticing improvements to existing […]
The results of the 2019 Debit Issuer Study, commissioned by PULSE®, a debit/ATM network, and conducted by Oliver Wyman, a global management consulting firm, show that consumer debit use has skyrocketed in the last year and will keep soaring. In 2018, the number of debit transactions increased by 6.7% reaching more than 68 billion. According […]
Some serious changes are in store for many Citi credit cards like the Citi Prestige Card, the Citi Premier Card, the Citi Double Cash Card, the Costco Anywhere Visa Card by Citi, the American Airlines AAdvantage MileUp℠ Card, and some other. The updates imply elimination of some consumer and travel benefits. The bank’s official response […]
Priority Pass is a world-known program offering its members access to over 1200 airport VIP lounges with free food, drinks and entertainment in more than 500 cities across 143 countries. The program is available to everyone who’s paid for membership, regardless of a tickets class.
A virtual credit card is a unique credit card number that is linked to your main credit card account but is different from the physical card number. The virtual credit card number allows to shop online or over the phone without using your physical credit card. The numbers can usually be used once and expire if not used. The cardholders can also delete the numbers if they want or need to.