CROMWELL — Connecticut Better Business Bureau says new regulations governing the three credit reporting companies should make it easier for consumers to fix inaccuracies in their credit reports.
Several new regulations stem from an investigation by 31 states dating back to 2012. The Federal Trade Commission (FTC) settlement involves a $6 million penalty imposed upon Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC., and they have agreed to make a number of changes to their business practices to make it easier and more effective when consumers try to get errors removed from their credit reports.
Highlights of the settlement include:
More protection for consumers who dispute credit reporting information:
The credit monitoring companies will put into place a faster mechanism to process consumers’ disputes, including identity theft, fraud, or mixed files, in which one individuals’ information is mixed with another’s. Each credit reporting agency must notify the other agencies if it finds that sort of file.
Some categories of debt may no longer be in credit reports:
- The credit reporting agencies are generally prohibited from adding information about parking fines and tickets, and may not place medical debt on a credit report until 180 days after the account is reported to the credit reporting agency. This gives consumers time to attempt to resolve problems with their insurers.
- The credit bureaus must require debt collectors to provide proof of the money owed and details about the creditor before debts are added to a credit report.
Ease-off the marketing talk:
- The credit reporting agencies can no longer market credit monitoring services to any consumer during a dispute phone call until the dispute portion of the call has ended.
- They must tell consumers that purchasing a product is not a requirement for disputing information on their credits reports.
These measures address a vital issue cited in a 2013 study from the FTC, that revealed one in five Americans had found at least one error in a credit report. The regulator said in some cases, the errors resulted in consumers being “…overcharged for credit card debts, auto loans, insurance policies and other financial obligations.”
While some consumers reported difficulties getting the errors fixed, those who were successful saw an increase in their credit score – the numerical expression of credit worthiness used by lenders.
The settlement also requires higher standards for data furnishers, from whom the credit reporting agencies receive information to be added to consumers’ credit reports.
For free copies of your credit reports, go here. The site established by the credit reporting companies and sanctioned by the federal government. If you find any errors, report them as quickly as possible. You also may call 877-322-8228.
If you are still unable to resolve a dispute about credit report errors, you may file a complaint here.
