This settlement will have a nationwide impact for consumers. Read on to learn more about the changes.
Under the terms of the settlement, the credit reporting agencies – Equifax, Experian and TransUnion – will be overhauling the way they handle dispute resolution.
Up to this point, when consumers filed disputes regarding information on their credit report, the dispute was converted to a three-digit code that was sent to the credit lender. The information typically wasn’t changed if the lender said that information was accurate.
The new agreement will require credit reporting agencies to hire independent staff to investigate the merit of credit disputes. They’re required to investigate the complaints even if the creditor says the information is correct.
A 2012 study by the FTC found that one in five consumers had an error that was corrected by a credit reporting agency after it was disputed on at least one of their three credit reports. A follow-up report done in 2015 found that most consumers who reported errors still felt that some part of the disputed information was incorrect.
Your credit is involved in so many transactions, including qualifying for a mortgage, and getting approved for credit cards and car loans. Some companies even check your credit during the job application process. It’s important to know what your credit report says about you.
Under the Fair and Accurate Credit Transactions Act, you can get your credit report from each of the major agencies once a year through AnnualCreditReport.com. The credit monitoring service Quizzle will allow you to check your Equifax credit report and score for free every six months. If you see something wrong, Quizzle can even help you start the dispute process.
According to a 2014 report by the Consumer Financial Protection Bureau, half of all bills that go to collections are medical bills.
Medical bills are often a complex case. Doctors will report the bills as being unpaid while consumers are dealing with their insurance company to try to get payment or reimbursement. For this reason, in August 2014, FICO, the nation’s largest provider of credit scores, announced that it would start weighing medical debt less heavily.
The new agreement takes things a couple of steps further. Credit monitoring agencies can’t put medical debt on a credit report until it’s gone unpaid for at least 180 days. If the bill is paid by the insurance company, the debt must be removed from the credit report no matter how old it is.
Credit disputes and medical debt reporting processes have changed quite a bit, but now you have the lowdown. Still have questions? Leave us a note in the comments.
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