It will be announced today that the 3 credit reporting agencies (CRAs) will be making some serious changes to the way they report your credit. After long meetings between the New York Attorney General’s office and the CRAs, decisions have been made to change the reporting of medical collections and the process of consumer disputing.
I know what you’re asking… “What does that mean and how does that benefit me?”
Here’s what you need to know:
Medical Collections
Countless times have I heard client’s horror stories: Their insurance company was late paying their medical bills, and now they have a medical collection reporting on their credit.
While medical collections won’t directly hold you back from obtaining a loan, they will bring your scores down which can indirectly affect the loan officer’s decision to get you approved. This new announcement ensures that medical collections cannot report on your credit until 6 months after your debt becomes delinquent. This allows those slowpoke insurance companies time to to pay off your debt before it hits your credit. The announcement also states that once the debt has been paid off or satisfied, it will be removed from your credit report. Soon the days of lingering paid medical collections will be long gone and your scores will improve!
New Consumer Disputing Process
Consumers who choose to dispute items on their credit report will now receive more information pertaining to those accounts. If the person disputing does not agree with the results they should receive, the CRAs will include actions each consumer can take.
The CRAs will have trained professionals examine and review all consumer disputes to ensure no mistakes will be made.
“The nation’s largest reporting agencies have a responsibility to investigate and correct errors on consumers’ credit reports. This agreement will reform the entire industry and provide vital protections for millions of consumers across the country,”
-New York Attorney General Eric Schneiderman
According to Credit Karma, 25% of consumers have credit report errors on their report. It’s no secret the CRAs are in a mess right now with consumer information. This new disputing process looks to fix the mess and help consumers eliminate incorrect information.
Changes will be implemented over the next several months in New York and nationwide within the next several years.