The three major credit bureaus (Experian, Equifax, and TransUnion) have agreed to new guidelines for handling disputes on credit reports. According to this settlement, announced Monday by the New York Attorney General, credit disputes will now be handled by trained reviewers to determine what actually happened.
In the past, the consumer would report an error, and the complaint would be lodged by a computer. This would either get checked internally (about 15% of cases) or get passed along to banks, credit card issuers, or other firms. This caused a conflict of interest, and consumers were usually stuck with the credit error. According to Ed Mierzwinski, consumer program director at advocacy group U.S. PIRG, “some consumers have spent years trying to rectify errors on their credit reports resulting from mistakes, fraud, or mistaken identities.”
With the new process, consumers will be much better protected when handling credit disputes. The credit bureaus will have to hire reviewers to make sure credit bureaus actually treat the complaints. Consumers will also now receive a second report for free once their dispute has been finalized to make sure the changes have been made, and their report is now correct. This will also increase protection for consumers with medical debt as the bureaus have agreed that bad medical debts will not be reported until after a 180 day waiting period. This will allow time for insurance payments to be paid.
The changes are expected to take effect nationwide over the next three years.
Source: BloomBerg Business
