Viewing entries tagged

The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement


The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement

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 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 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).

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 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 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, 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. 


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.