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News Now

March 30, 2015

Protect yourself against credit-rating agency errors

Consumer
ARLINGTON, Va. (3/24/15)--After more than a decade of filing complaints about errors--and getting nowhere--consumers are about to get relief. Under a new agreement, credit rating agencies will be required to conduct independent reviews of complaints, correct the reports and change the way they treat medical debt (PBS News Hour March 9).

The three largest credit rating agencies (CRAs)--Equifax, TransUnion and Experian--were relying on lenders to provide data, without conducting independent reviews. Consumers would find errors in their credit reports and submit documentation of proof to the Federal Trade Commission (FTC), but nothing would change.

The new agreement, which begins in six months and lasts three years, brings the changes consumers have been waiting for: The agencies will be required to use specially trained employees to conduct an independent review of every complaint.

In addition to independent reviews, consumers can expect:
  • Help with complex issues. A special team of people will deal with issues like identity theft or file mix-ups.
     
  • Improved data quality. Lenders, credit-card issuers and collection agencies will use consistent standards for reporting credit data, monitored by the CRAs. 
     
  • Help with tickets or fines. The CRAs will stop reporting debts such as tickets or fines that do not arise from an agreement to pay.
     
  • More time to deal with medical debt. Consumers will have more time--180 days--to resolve conflicts over unpaid medical debt. Medical debt accounts for 52% of all debt on credit reports.
     
  • Favorably resolved medical debt will disappear from reports. After an insurer pays a medical debt, the CRAs will remove the debt from the consumer's credit report.
     
  • Expanded educational material. Consumers visiting annualcreditreport.com to obtain an annual free credit report will see expanded educational material and, if they dispute a report, no longer will have to wait a year for another free report.
The FTC estimates that 10 million Americans have errors significant enough to affect the cost of borrowing.

Request your free credit report from all three agencies once a year. Always make your requests from annualcreditreport.com, the only site sanctioned by the FTC, or, call 877-322-8228. Better yet, monitor your credit report year round by making one request every four months in rotation among the three CRAs.

For related information, read "Six Slam-Dunk Ways to Trash Your Credit Score" in the Home & Family Finance Resource Center.
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