This month, the three nationwide credit reporting agencies (Equifax, Experian, and TransUnion) agreed to significant changes in their credit reporting practices and the way they handle consumer disputes. These voluntary changes, which resulted from a settlement with New York Attorney General Eric Schneiderman, are set forth in what the credit reporting industry is calling The National Consumer Assistance Plan. (Learn what a credit report is and what is contains in Credit Report Basics.)
Here are the highlights of these new policies:
180-Day Waiting Period Before Reporting Medical Debts
In what many consider to be the most significant change in the plan, the credit reporting agencies (CRAs) have agreed to a 180-day waiting period before recording delinquent medical debt on a credit report. As we all know, insurance companies are notoriously slow in determining what will, and will not, be covered and then issuing payment. This waiting period will mean that consumers won’t have negative marks on their credit reports for medical bills that are tied up with the insurance company.
As a corollary to this new policy, the CRAs will also remove notations of delinquent medical debt for those accounts that have subsequently been paid by insurance.
Traffic Tickets or Government Fines Won’t Appear in Credit Reports
Credit reports will no longer contain negative information about traffic tickets or government fines. The CRAs will only record information about debts that arose from a contract or agreement.
More Information When Disputing Inaccurate Information
If you dispute an item on your report and are not happy with the result, the CRAs will now provide you with information about your options and further steps you can take. And if you successfully dispute an error after getting your free annual credit report, you can get another free report within the year. (Learn how to dispute errors on your credit report.)
Enhanced Dispute Resolution System for Identify Theft, Fraud, and Mixed Credit Files
The three nationwide CRAs are devising enhanced dispute resolution procedures for victims of identity theft and fraud, and for those whose credit file was mixed with another’s file.
When Will These Changes Take Effect?
The CRAs will start implementing the new policies over the next several months. Experts anticipate that they will take from three to thirty-nine months to complete (depending on the particular policy).