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Huge Changes Coming to a Credit Bureau Near You


Huge Changes Coming to a Credit Bureau Near You

Consumers can expect to see major changes in the way that the credit reporting agencies - Equifax, TransUnion, and Experian - handle much of the information on their credit reports and the consumer dispute process in the coming months and years. In fact these changes, brought about as part of a settlement agreement released on March 9, 2015, are so sweeping that they have the potential to lead to higher credit scores for millions of US consumers.  

The settlement came about after New York State Attorney General Eric Schneiderman and his office began investigating the practices of the 3 credit reporting agencies in 2012. While the neither Equifax, TransUnion, nor Experian were actually found to have violated any laws, the 3 credit reporting giants have agreed to a settlement which will implement a very significant overhaul affecting many different credit reporting and consumer dispute policies.

Additionally, the changes will not merely apply to residents of the state of New York but rather will be implemented for consumers nationwide. Without question the settlement marks the most significant change in credit reporting since the Fair and Accurate Credit Transactions Act (FACTA) amendment to the Fair Credit Reporting Act (FCRA) in 2003.  In fact, credit reporting changes of the magnitude included in the settlement agreement generally only come about when mandated by federal law.

The lengthy settlement agreement (a whopping 41 pages long of not-so-light reading) details a massive amount of information regarding the credit reporting practices changes to come. Here are some of the most important highlights.

Time Frame

·        The changes detailed in the agreement will not take place overnight; however, they will be implemented nationwide over the next 6 to 39 months (3.25 years).

Medical Collections

·        According to the agreement unpaid medical collections will not be permitted to be added to a consumer's credit reports for a period of 180 days (approximately 6 months). The change is designed to prevent consumers from having unnecessary derogatory collection accounts added to their credit reports in cases where a medical insurance company is simply dragging its feet to pay a bill - a common occurrence.

·        When a medical collection is paid by an insurance company it must be removed from a consumer's credit reports immediately, regardless of how long it has been there. Previously paid medical collections were permitted to remain on a consumer's credit reports, leading to credit score damage, for 7 years from the date of default on the original account.

More Free Credit Reports for Consumers with Disputes

·        Each credit bureau has also agreed to provide an additional free credit report to consumers who file a dispute using an credit report. Previously, as part of 2003's FACTA, consumers were only entitled to only one from credit report every 12 months via the same website.

Changes to the Dispute Process

·        Perhaps the biggest changes to come about as a result of the settlement are among those involved with the consumer dispute process.

¨      Refusing to Process Disputes - The credit bureaus are no longer permitted to refuse to accept a dispute due to the fact that a consumer has not receive a credit report recently nor for the failure of a consumer to include a credit report identification number with his/her dispute.

¨      Deceased Indicator Changes - When a credit bureau receives a dispute from a consumer than an account on his/her credit report is inaccurately reporting that the consumer is deceased (and the credit bureau's investigation has in fact revealed that the consumer's dispute has merit) the credit bureau must share the information regarding the incorrect "deceased indicator" with the other 2 credit bureaus so that they may remove the indicator as well. (These inaccurate deceased indicators often show up on a consumer's credit reports when they hold a joint account with someone who has passed away.)

¨      Review of Supporting Dispute Documentation Submitted by Consumers - Previously if a consumer filed a dispute with documented proof of a credit reporting inaccuracy the credit bureau would still rely upon the data furnisher (i.e. creditor or collection agency) to review the dispute and determine whether to verify or delete the account. Under the new agreement when a consumer includes documentation to support a dispute and the data furnisher verifies the account as accurate anyway the credit bureau will be required to assign an agent to perform its own investigation, independent of the data furnisher. If the credit bureau agent determines that the consumer's dispute is indeed valid then the agent will have the authority to modify or delete the disputed account.

¨      Escalated Dispute Handling - The credit bureaus will be required to process disputes occurring as a result of fraud, identity theft, and mixed credit files (where the files of 2 consumers are merged into 1) in an escalated manner. Escalated disputes will be handled by specialized groups with experience in these complex dispute situations. 


Michelle Black is leading credit expert with over 13 years of experience, the credit blogger at, a recognized credit expert on talk shows and podcasts nationwide, and  a regularly featured speaker. She is an expert on credit reporting and scoring, budgeting, and identity theft.



Will the New Credit Scoring Model Help Me?

New Credit Scores
New Credit Scores

Have you heard about the new credit scoring model that has just been released? I have had a ton of questions this week regarding the new version of VantageScore and I know that many of our readers are wondering how this new scoring model will affect them. So, here's the skinny, the scoop, the 411 about the new, potentially exciting version of VantageScore. First of all, for those who are confused, let me explain exactly what the VantageScore is and how it is used.

VantageScore is the credit scoring model created by the 3 major credit bureaus - Equifax, TransUnion, and Experian. A credit score is a number which represents your creditworthiness, a number that lenders rely upon when deciding whether or not to loan you money for a car, a home, etc. If you visit one of the 3 credit bureau's websites and pay to pull your credit report you can receive a copy of your VantageScore. However, while VantageScore is used by some lenders, the vast majority of lenders will look at your FICO credit score anytime that you apply for a loan. (FYI, if you want to access your FICO scores you can do so for a fee at, but only from 2 of the 3 major credit bureaus.)

FICO scores and VantageScores are different because they use different scoring models to determine a consumer's credit score. The range of a FICO score is between 300 and 850. Previously, the range of a VantageScore was between 501 and 990. However, under the new VantageScore 3.0, the scoring range is being changed to match FICO's range of 300 to 850. I believe this is a great move for consumers because it will help to reduce some confusion with regard to credit score ranges. Still, even though the scoring ranges will match a consumer would still have a different VantageScore than his/her FICO score. For example, if Joe Consumer has a 680 VantageScore under the new scoring system he will not automatically have a 680 FICO score. The reason for the score difference is because both VantageScore and FICO have different scoring models - an action (i.e. paying off a collection account) may trigger a score increase under one model, but no increase under the other.

The most exciting change for consumers under VantageScore 3.0 is how the scoring model treats paid collection accounts. The previous version of VantageScore would factor collection accounts into the credit score for 7 years, even if the collection account was paid or settled by the consumer. So, under the previous model a collection account with a $0 balance would hurt a consumer's credit scores. VantageScore 3.0 will NOT factor paid/settled collection accounts into a consumer's credit score. A consumer who has $0 balance collections on his/her credit report but no additional negative activity will likely see a significant increase in their VantageScore. This is a very big change and, in my opinion, great news for the consumer.

Unfortunately, as I mentioned above, this change only applies to VantageScore 3.0, not FICO. Since the large majority of lenders currently use a FICO scoring model the new changes will probably not help someone who is applying for a mortgage or a vehicle. We can only hope that, in the future, FICO follows suit and changes their scoring model as well or that more credit grantors begin to adopt the VantageScore for use in their lending decisions. I would not expect any immediate changes, but I do believe the new VantageScore scoring model is a win for consumers.

Michelle Black is an 11+ year credit expert with HOPE, the credit blogger at, 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 recovering from identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here.



60 Minutes Exposes the Credit Bureaus

On Sunday, February 10, 2013, 60 Minutes exposed their shocking investigation of the nation's 3 major credit bureaus: Equifax, Trans Union, and Experian.
If you have not seen the report yet, click here. Every American should see this report:

If you are a victim of the credit bureaus, like 40 million other Americans, you have rights! You have the right to dispute errors and inaccuracies on your credit report; however, you do not have to face this challenge alone. Call 704.499.9696 today and a HOPE credit expert will be happy to explain your rights and to answer your questions.



5 Ways to Give Your Credit a Kick in the Pants!

5 Ways to Give Your Credit a Kick in the Pants!By Michelle Black

Earlier this week we discussed The 5 Fastest Ways to Damage Your Credit.  If you have not reviewed this list yet, please take a moment to check out the article.  It may save you from making a detrimental mistake which could set your credit score back as much as 100 points!

However, today we will be focusing on a subject that is always much more enjoyable: Ways to improve your credit.  Since the 3 credit bureaus (Equifax, TransUnion, and Experian) all have a different system they use to determine your credit score, it is impossible to predict specifically how much any one action will change your credit score.  Still, we do know that if you heed the following advice, your credit scores cannot help but to improve with all 3 of the credit bureaus (as long as no new negative actions on your credit counteract the new positive changes):

1.  Make payments on time. I always like to start with this recommendation because payment history is the single most important factor making up all 3 of your credit scores.  A whopping 35% of your credit score is determined by your ability to make your payments on time.  Even if you have had some recent late payments (within the past 24 months) that have damaged your credit score, if you make a plan today to start paying your current bills on time you will start to slowly dig yourself out of the hole. Plus, if you want to dig yourself out of the proverbial credit hole even faster you can check out some of the great services that HOPE has to offer. 2.  Have enough open credit cards. It is important to have open revolving accounts (AKA credit cards) on your credit report.  Your credit score is a snapshot to potential lenders of how you pay your bills.  Therefore,  if you do not have enough open accounts, you may have low scores or even no scores at all. HOPE members, please check with your HOPE credit specialist to see if it is recommended for you to open additional credit card accounts or if you already have enough active accounts appearing on your credit report. 3.  Pay down open credit cards. Yes, it is definitely recommended that you establish some current credit card accounts if you do not currently have enough open.  However, it is not recommended that you establish any new debt by charging up the balances on your credit cards.  If you do have balances on any of your current credit cards, especially if the balance is over 50% of your credit limit, aim to pay off your credit cards ASAP.  You could potentially see a huge increase in your credit scores by following this advice.  (Note: current HOPE members can contact us to request a HOPE Snowball Debt Payoff Worksheet for help making a plan to pay off your current debts.) 4.  Check your credit report for mistakes/erroneous information. All 3 credit bureaus are quite notorious for making mistakes on our credit report.  Even if your credit report is in pristine condition, it is important to check your credit report 1-2 times every single year to make sure that there are no new errors being reported.  The good news is that you are legally entitled to a free credit report (minus your credit scores) every year from  Make sure to check your report with all 3 credit bureaus. 5.  Use old credit cards occasionally. Your length of credit history makes up approximately 15% of your credit score.  This means that those older credit card accounts on your report actually help to boost your credit scores more than new accounts.  Often a creditor will automatically close a credit card account if you do not use it for a prolonged period of time due to inactivity on the account.  Solution?  Use your old credit cards several times per year for a small purchase (which you pay off immediately) in order to keep your older accounts open and active.

Don't forget, if you or someone you know is in need of professional credit advice or assistance, we would LOVE for you to take the time to consider the services offered by the HOPE Program.  We want the opportunity to answer your questions and offer our unique expertise on all situations related to your credit report and credit scores.  There really is no such thing as a HOPEless situation! Please feel free to give us a call with any questions you may have at 704-499-9696.  We hope to hear from you soon!