the top 5 things you need to know about the credit reporting agencies' new settlement agreement...
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5/1/2015 The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement — Hope4USA
http://www.hope4usa.com/creditrepairnewscharlottenorthcarolina/thetop5thingsyouneedtoknowaboutthecreditreportingagenciesnewsettlement… 1/8
The Top 5Things YouNeed To KnowAbout TheCreditReportingAgencies' NewSettlementAgreement
April 30, 2015 by Michelle Black
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5/1/2015 The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement — Hope4USA
http://www.hope4usa.com/creditrepairnewscharlottenorthcarolina/thetop5thingsyouneedtoknowaboutthecreditreportingagenciesnewsettlement… 2/8
Media outlets were set into a frenzy last month when the New
York Attorney General's office announced a landmark settlement
agreement which had been reached with the 3 major credit
reporting agencies - Equifax, TransUnion, and Experian. The
agreement will completely overhaul many of the practices and
policies previously held by the credit reporting agencies (CRAs)
and has the very real potential to bring about credit score
increases for millions of American consumers.
The 41 page long agreement will introduce a large number of
credit reporting and dispute resolution changes, some of which
are not all that exciting for consumers and several others which
are extremely so. If you are interested in reading the agreement in
its entirety it can be found here. However, for those of you who
would simply prefer the highlights you can read below for the top
5 things which you need to know about the new settlement
agreement and the ways it may or may not impact you directly.
1. Changes will be implemented for consumers nationwide.
Although spearheaded by the New York Attorney General, Eric
Schneiderman, and the despite the fact that the settlement was
actually made solely with the state of New York, all of the changes
detailed in the settlement will be implemented for all US
consumers across the country. One of the primary reasons why
the new policies and procedures will be rolled out for all
consumers instead of only those consumers located in New York
state is due to the fact that it does not make sense, logistically
speaking, for the CRAs to have separate policies and procedures in
place for an individual state.
2. Changes will still take time.
The CRAs are going to have to complete tremendous amount of
programming work in order to implement the changes detailed in
the settlement and, as a result, the changes are not expected to
happen overnight. Instead the CRAs have been given a total of 3
years and 3 months, broken down into 3 phases, to complete all of
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5/1/2015 The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement — Hope4USA
http://www.hope4usa.com/creditrepairnewscharlottenorthcarolina/thetop5thingsyouneedtoknowaboutthecreditreportingagenciesnewsettlement… 3/8
the steps which will be required in order to comply with the
settlement. Here is a quick overview of the 3 phases.
· Phase 1 (September 8, 2015)
The easiest changes in the settlement must be implemented by
this date. These primarily include changes which will not require
an extensive amount of programming and/or training.
· Phase 2 (September 8, 2016)
The changes which must be implemented by the Phase 2 deadline
are those which are more (but not most) time consuming from a
logistical standpoint. Phase 2 initiatives will involve the
development of many new internal policies in addition to new
polices for credit reporting between the CRAs and their customers
(aka data furnishers).
· Phase 3 (June 8, 2018)
The "Completion Date" detailed in the settlement is the deadline
for implementing all remaining changes in the settlement.
Changes included in the Phase 3 rollout are the most time
consuming in nature from a programming and training standpoint.
3. Medical Collections
Among the most exciting new policy modifications in the
settlement include those which are related to the handling of
medical collection accounts. Once implemented there will be 2
major changes in medical collection reporting procedures.
a. Delayed Reporting - Medical collection
accounts will not be permitted to appear on a
credit report until the account is at least 6 months
past the date when the account initially went
delinquent. This change is required to be
implemented by Phase 3 (June 8, 2018). Preventing
the early reporting of medical collections will allow
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5/1/2015 The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement — Hope4USA
http://www.hope4usa.com/creditrepairnewscharlottenorthcarolina/thetop5thingsyouneedtoknowaboutthecreditreportingagenciesnewsettlement… 4/8
consumers more time to ensure that medical bills
are paid by insurance without the fear of their credit
reports and scores being damaged due to slow
insurance claim review processes.
b. Accounts Paid by Insurance - By the Phase 2
deadline (September 8, 2016) the CRAs will be
required to remove or suppress from credit reports
any medical collections which are paid or are being
paid by a consumer's medical insurance provider.
The removal/suppression will be retroactive and will
apply to medical collection accounts which were
paid by insurance in the past but are still currently
remaining on any consumer's credit report. What
makes this change especially exciting is the fact
that the removal of a collection account from a
consumer's credit reports, depending upon the
situation, could potentially have an extremely
positive impact upon that consumer's credit scores
especially if it were the only negative account
present.
4. More Dispute Resolution Influence from the Credit Reporting
Agencies
One of the more anticipated changes by consumers which will be
implemented in Phase 1 (September 8, 2015) has to do with the
way which the CRAs handle certain disputes. In the past when a
consumer disputed an account with the CRAs and included
supporting documentation (i.e. proof that an account was paid off)
the CRAs would still fully rely upon the data furnisher to either
modify, delete, or verify the account.
Once the new policy is implemented, should a consumer submit
disputes to the CRAs with supporting documentation AND the
account is still verified as accurate then the CRAs themselves will
also be required to assign agents to review the supporting
documentation in order to determine if a deletion or change is
warranted. If a change is deemed to be warranted then the CRAs
will actually modify or delete the inaccurate account themselves.
Should everything work as planned then it should result in a much
easier process for consumers to see errors corrected on their
credit reports (provided they have proof of the error).
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5/1/2015 The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement — Hope4USA
http://www.hope4usa.com/creditrepairnewscharlottenorthcarolina/thetop5thingsyouneedtoknowaboutthecreditreportingagenciesnewsettlement… 5/8
5. More Free Access to Credit Reports
Since the FACTA amendment to the Fair Credit Reporting Act was
passed in 2003 consumers have had the right to claim a free credit
report from each of the 3 CRAs annually via the website
AnnualCreditReport.com. In addition to this free report some
consumers will also be entitled to a 2nd free annual credit report
from the same website as part of the new settlement. The
additional free report, which must be made available by the Phase
2 deadline (September 8, 2016), can be claimed by any consumer
who meets the following criteria: (a.) the consumer already pulled
an initial report from AnnualCreditReport.com in the past 12
months and (b.) the consumer initiated a dispute after doing so.
As previously mentioned, the full settlement agreement spans a
total of 41 pages. There are certainly many other changes which
will be brought about as a result of the new settlement in addition
to those listed above. If you are interested in learning more about
the coming changes feel free to check out the following article:
Huge Changes Coming to a Credit Bureau Near You.
Michelle Black is leading credit expert with over 13 years of experience, the
credit blogger at HOPE4USA.com, a recognized credit expert on talk shows
and podcasts nationwide, a contributor to the Wealth Section of Fort Mill
Magazine, and a regularly featured speaker at seminars up and down the East
Coast. She is an expert on improving credit scores, budgeting, and identity
theft. You can connect with Michelle on the HOPE Facebook page by clicking
here.