Credit Scoring Rules New Amendments
Credit Scoring Rules Amendments Include More Information
Equifax, Experian and Trans Union, the nation’s 3 credit reporting giants have agreed to some key policy changes. Under pressure from New York Attorney General Eric Snederman’s lawsuit the credit reporting agencies have agreed to a number of important changes to be implemented nation wide over the next 39 months. Trained employees will be required to review the documentation even if the creditor says it is correct. Special representatives will deal with creditors and lenders.
“The nation’s largest reporting agencies have a responsibility to investigate and correct errors on consumer credit reports. This agreement will reform the entire industry and provide vital protections for millions of consumers across the country.” said Snederman in a statement about the changes won through over a year of negotiations. Of most concern to consumers are the following provisions:
- People who contest items in their credit report will receive more information concerning their disputes including instructions on what to do if not satisfied with the answer.
- Medical debt won’t be reported until a 180 day waiting period passes to allow time for insurance payments to be processed.
- Medical debt reported in collections will be removed if it has been or is being paid by insurance.
New credit scoring rules provide that all debts such as tickets and fines that did not arise out of a contract with the consumer will be deleted and expunged. Those who file a dispute will get a second set of free credit reports that year.
Medical Debt Changes are Widespread
In August of 2014 FICO announced changes in their credit scoring rules providing that medical debt will have a smaller impact on credit scores. The average amount reported for medical debt is $600.00. Over 43 million Americans have past due medical debt. 52 per cent of all debt on credit reports is medical.
Equally important was the announcement that debts that go to collection agencies and are satisfied will no longer be counted. Further reforms are in the works as the credit scoring system yields to consumer demands for more fairness and transparency.