Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Credit Reporting Agencies Overhaul Methods

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Credit Reporting Agencies Overhaul Methods

Article excerpt

Fixing errors on consumer credit reports should become a much smoother process thanks to reforms put in place earlier this month by the three major credit reporting agencies.

In what is being hailed as the most radical overhaul to credit reporting in decades, Experian, Equifax and Transunion have agreed to make sweeping changes to everything from the format they will accept from lenders to how they conduct investigations of disputed items to when they will accept medical collections.

The changes could benefit an estimated 200 million consumers who are serviced by the big three agencies.

The three national credit reporting agencies struck an agreement in March with New York's attorney general, Eric Schneiderman, to reform their practices.

Although that settlement just affected that state, the credit bureaus are making the changes nationwide.

The reforms address some of the most common complaints by consumers, including the accuracy of credit reports, the efficiency of complaint resolutions and the damage done to consumer credit histories because of medical debt.

Atlanta-based credit expert John Ulzheimer said that the Federal Trade Commission found between 10 percent and 21 percent of consumers have an error on their credit reports.

"The range is due to how conservative or liberal the FTC's definition of what an error is," he said. "In a worst-case scenario, errors on a credit report can cost someone a loan, result in them paying a higher interest rate or keep someone from getting a job if the employer uses credit reports as part of the screening process."

Among the changes being made by the credit reporting agencies, medical debts will not be put on a consumer's credit report until after a 180-day waiting period to allow insurance companies payments to be taken into account.

Also, all medical debts will be removed from a consumer's credit report after the debt is paid by insurance.

"For years, perhaps decades, consumer advocates have complained about the travesty that is the dispute process for credit reporting agencies," said Chi Chi Wu, staff attorney for the National Consumer Law Center in Boston. …

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