How do the Sweeping Changes in the Credit Reporting Industry Affect Your Credit Score?



Just a few months ago, a major overhaul affecting the ways credit bureaus treat certain kinds of debts and errors on credit reports was enacted, thanks to an agreement between Experian, Equifax, TransUnion and NY Attorney General Eric Schneiderman. Credit reports are used to calculate credit scores, which determine your likelihood of being accepted for a loan, a credit card, a job or a place to live, and also can dictate your interest rates (based on how much of “a chance” credit companies see themselves as taking on you; the lower your credit score, the higher the interest on your loan). Happily for consumers, this change is great news for many individuals; we’ve outlined some of the ways these major changes can positively affect your credit score. Working with qualified credit repair companies to help you best take advantage of these changes is the first step towards a better credit score!

  • Unpaid medical bills will not be reported to the credit bureaus until 6 months after reaching delinquency.

Those with hefty medical debts will now have more time and flexibility to recover from their burden. This new model for dealing with medical debt was introduced because many consumers were having issues with insurance companies not having enough time to pay claims before the medical debt was considered delinquent, which would then damage credit scores. Consumers paying for insurance should not have to suffer from plummeting credit scores due to the actions of insurance companies, and with the new regulations, they no longer will.

  • Credit companies will be more proactive in resolving disputes over errors.

With the new regulations in place, credit reporting companies will have to use specially trained employees to review consumer submissions regarding errors in their credit reports. Even if a creditor claims the information is correct, someone must still look into the issue in order to resolve it. Part of the major issue with the process of resolving credit report errors is the lengthy and difficult process consumers must undergo to fix errors that are in no way their fault; now, the process should be both simplified and expedited. Since it has been found that 1 in 5 people have an error on their credit report, this is a big deal!

  • There will be increased attention to resolving issues related to identity theft and fraud.

Identity theft is possibly the most unfair path to poor credit; the repercussions of the bad luck that caused identity theft and credit card fraud can follow individuals for years after issues are resolved, despite the debt in question not being their own. With increased attention to consumer demands for credit score dispute resolution, these issues too will be resolved more quickly, and with greater clarity.

These changes to the ways credit reporting agencies operate will kick in within the next 6 months to 3 years. Contacting a credit repair agency, such as our own, is the best way for consumers to quickly, efficiently and effectively contact credit reporting agencies in order to jump on the new chances for an improved credit score.