It’s the largest shift for consumers and their credit scores in over a decade. The three biggest credit rating firms – TransUnion, Equifax and Experian, have concurred to change the way they evaluate errors, a process that frequently has a negative effect on the consumer ratings up until now.
Under the agreement with the state of New York, the firms will employ specially-trained workers to review the details disputed by a client. They will as well require waiting for 180 days prior to posting unsettled medical debt to a report to let conflicts and insurance payments able to be resolved.
The companies will gather and give information on over 200 million Americans and approximately 52% of all debt on credit reports is from medical costs. The New York attorney general, Eric Schneiderman, transacted the settlement. And now he joins me. Thank you for being with us Mr. Attorney General.
Basically this report says that it will reform the whole industry, so it seems that it’s riddle with issues now. Is that the case?
Eric, Schneiderman, New York Attorney General said, “Well, we did – we initiated an investigation since we got it in our office and other offices have similar experience. There are lots of complaints from the client saying that there were errors on their credit reports, submitted files confirming that the negative information should come off the report, but haven’t got anything finished.”
“So what we found out was the industry and this agreement really changes the operations of the industry, that it was just depending on the raw information that it received from the so called data furnishers, who are said to be the lenders, he added.” They were depending on it and if he taken the mortgage and got a car loan, credit card, and the lenders, according to the creditors, he didn’t pay, fundamentally, the credit reporting firms were taking them at their word.
And of a client would send in files proving that its fake, they were only passing them to the creditors. If the creditors will return to the reporting agency and think that they were still right, they weren’t making an independent search.
Now, they have modified the way they arrange with this process and it will make better data, since they will be responsible for ensuring they have valid information. Moreover, they will be committed in doing their own independent review of complaint from every client, regardless of what the data furnisher and lender says.
They also have agreed to gather and finance a special group of people with specialist for intricate issues, such as mixed files or identity theft, which will occur when two people with same names gets their files combined and a client sees on their credit report utility fees for a house they never really lived in.
Thus, they’re changing the way they are dealing with the complaints of their customers. However really it’s wider than that, since it changes their entire relationship to their entire creditor who offers the raw material for credit reporting. They are taking the responsibility for watching and checking if there are some people giving them details who constantly are having issues.
This will not just provide help to consumers to correct their bad reports but also to improve the data quality of their credit reporting. And, as you said medical debt is a big issue. So they also made changes on how they deal with that.
Hence, it goes without saying that you can’t just simply rely on credit repair companies since there are far better means to improve your credit rating. Take note of that.