On March 9th, 2015, New York Attorney General, Eric T. Schneiderman announced a settlement with the three major credit bureaus, Experian, Equifax, and Transunion, which requires them to implement a number of changes designed to improve credit reporting accuracy and make it easier for consumers to dispute errors.
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. – Attorney General Schneiderman
The agreed upon changes are to be rolled out in three phases over a 3 year and 90 day period. The estimated completion date is June of 2018.
Although these changes are exciting, consumers may want to wait before celebrating; there is a long road ahead which involves the bureaus, the furnishers of data, retooling of software, introduction of new practices, and extensive training and testing. And although the work has started, the actual reporting changes will not be implemented until phase three which spans an 18 month period ending in June of 2018.
- Medical Debt Waiting Period: The bureaus will institute a 180-day waiting period before reporting medical debt. This is designed to allow time for insurance issues, disputes, and delays to be resolved.
- Medical Debt Deletion: The bureaus will remove medical debt from consumer’s credit reports if the reported debt is paid by insurance.
- Non-Contractual Debt: The bureaus will not report certain categories of debt such as traffic tickets and fines that did not arise from a contract or agreement to pay.
- Payday Loans (for New York residents only): New York State maintains a database of payday loan lenders that operate in violation of New York lending laws. The credit bureaus will no longer report debt from these lenders.
- Dispute Processing for Mixed Files, ID Theft, and Fraud: The bureaus will train specialized personnel to review supporting dispute documentation provided by consumers. Once implemented, all disputes related to mixed files (also known as file merger errors), identity theft, and fraud will be reviewed by these specially trained employees.
- Dispute Processing for Verified Items: In the case that a disputed item accompanied by documentation has been verified as accurate through the automated system, these specially trained employees will be given the discretion to review the documentation and resolve the error themselves.
- Additional Free Credit Report: Consumers will be allowed a second free credit report from each bureau after a dispute has been processed to allow consumers the ability to verify that the correction has been made.
- Furnisher Monitoring: Under the agreement the bureaus are required to create what has been termed a “National Credit Reporting Working Group”, to monitor furnisher’s compliance with dispute requirements. The Working Group will police ongoing compliance as well as develop Best Practices and Policies which furnishers must abide by, and to take corrective action against those that do not.