http://financialrescuellc.com - A study mandated by Congress and conducted by the Federal Trade Commission, found out that one out of five American consumers has an error on his or her credit report.

1. New Credit Reporting Changes the Will Benefit Consumers
If you have ever filed for a complaint about an error on your credit report,
then you probably know you have to jump through hoops in order to get it
fixed.
A study mandated by Congress and conducted by the Federal Trade
Commission, found out that one out of five American consumers has an
error on his or her credit report. Twenty-one percent of the American
consumers in the study found a “confirmed material error” in at least one of
the three biggest credit reporting agencies. “Confirmed material error”
means that when such error is corrected, it will change one’s credit report.
And we all know how credit reports impact our finances.
The study, by the way, tracked the credit histories of about 200 million
Americans, which means that around 40 million have errors on their credit
reports.
“The study also reported that 5.2 percent of the representative group found
and, with the assistance of the report’s researchers, successfully
challenged a mistake so serious that it had lowered their credit score
substantially enough to burden them with higher interest rates.”1
Even today, getting a credit report error fixed is a pain. Thankfully,
concerns and complaints about these errors have reached the office of the
New York State Attorney General Eric Schneiderman, who has recently
struck a deal with the three biggest credit reporting agencies (CRAs) that
will benefit not just all individuals in the United States.

2. What are these changes?
Improvements in the credit dispute process
Under the agreement, Equifax, Experian, and TransUnion will improve their
dispute resolution process for consumers who have credit reporting errors,
as well as those who are victims of fraud and identity theft.
With this new change, the credit bureaus will have a more proactive role
in fixing credit report errors. Before, they only rely on the lender to
resolve a dispute: if a creditor tells them that the information on the credit
report is correct, the credit reporting agencies will no longer investigate.
Individuals who have undergone a credit disputation understand how
painfully slow and frustrating this is.
Under the new agreement, however, with the credit agencies’ promise to
improve their system, all these will change. CRAs will be hiring employees
to implement the changes. Trained employees will be in charge of
investigating on a case, despite a creditor’s insistence that a reported
information is correct.
Improvements in reporting medical bills
According to the Consumer Financial Protection Bureau (CFPB), about 43
million Americans have overdue medical debts on their credit reports.
Not all medical debts, however, are consumers’ faults. Some of those
medical debts are caused by insurance companies that delay payments to
hospitals and medical professionals.
This is unfair for some of us. Luckily, under the new agreement with the
New York State Attorney General, credit reporting agencies will have to
wait for 6 months or 180 days before updating the information on our credit
reports.
The 180-day waiting period will the insurance companies to pay the
necessary bills. What’s better is that when medical debts are paid by an
insurance company, no matter how late it had been, credit reporting
agencies will have to remove the negative item from the credit report.
Late last year, FICO announced that it will be rolling out changes to their
popular scoring model, which is used by the biggest credit reporting
agencies. Their new scoring model will not include in its calculation debts in

3. collection accounts and medical debts that were paid through settlement.
This change should shift consumers’ mindset from worrying too much
about their credit score to simply getting their account paid for less by way
of debt settlement.
What’s in it for you?
What is the significance of these changes in the credit reporting industry to
ordinary consumers?
To quote New York State Attorney General Eric Schneiderman, “credit
reports touch every part of our lives. They affect whether we can obtain a
credit card, take out a college loan, rent an apartment or buy a car – and
sometimes even whether we can get jobs.”
Like it or not, such piece of paper is an important part of life, at least in the
United States. An error, which may influence your 3-digit score has far-
reaching effects, that it is only right to have credit bureaus take the matter
seriously.
Luckily, changes are happening that will help more consumers become
credit worthy again, at a shorter period of time.
However, this does not mean that it is better to just leave an account to
become delinquent. It is still our obligation to repay what we owe to our
creditors.
Consumers should also be checking their credit reports regularly to make
sure that they are error-free because such errors can lead to creditors’
charging more for your credit. And who are prone to committing errors in
submitting information to credit reporting agencies? The creditors
themselves.
Source:
1. http://www.creditcards.com/credit-card-news/ftc-credit-report-mistakes-
1270.php