Credit Reporting Reform Underway

Credit Reporting Law Overhaul

Credit Reporting Law Overhaul

2015 is a big year for the credit reporting industry. Major changes are underway. Earlier this year, Equifax, Experian, and Trans Union announced that they would change the way they handle credit disputes and unpaid medical bills. Credit experts say the announcement marks the biggest reform for the credit reporting industry in more than a decade. Most importantly, these changes will help millions qualify for better interest rates on student, home, and auto loans.

The credit reporting agencies announced that they would be more diligent when it comes to resolving consumer disputes. Until the promised changes are made, the industry standard for handling disputes goes like so: 

1) A consumer disputes inaccurate information with documentation backing up the dispute. 

2) The staff at the credit reporting agencies would take the disputed information and contact the furnisher who is reporting it.

3) The furnisher replies to the credit reporting agency by confirming that the information is what they are reporting.

4) The staff at the credit reporting agency relays confirmation of reporting to the consumer. No further action is taken. No one actually investigates to see if the information itself is wrong. 

The credit reporting overhaul will improve this very dispute process. Credit reporting agencies will be required to use trained employees to actually review the documentation accompanying the dispute. And, if a furnisher says its information is correct, the credit reporting agencies must still look into it and resolve the dispute. 

In addition, Equifax, Experian, and Trans Union announced that they will change the way they handle unpaid medical bills. Prior to implementing these changes, when a credit reporting agency received medical bill information from a collection agency, they would immediately report the delinquency. The credit reporting overhaul will now require the credit reporting agencies to wait 180 days before adding any medical debt to a consumers credit file. This grace period was designed to mirror the lag time created by insurance companies as they tend to be slower when making payments. 

These changes will be implemented nationally and will kick in over the next five months to two years.