If you find yourself frustrated with credit bureaus and the way information is reported to them, relief may soon be on the way. In a nod to growing consumer frustration, California U.S. Representative Maxine Waters, who heads the House Financial Service Committee, recently reintroduced a draft bill proposing sweeping reforms to the credit reporting industry. Dubbed the Comprehensive Consumer Credit Reporting Act of 2019, the bill aims to deliver expanded rights to customers and increased transparency into the credit reporting process. Let’s take a look at the proposed credit reporting reforms and how they could transform your credit report for the better.
Changes to the Dispute Process
Much of the bill revolves around changes to the dispute process, with an emphasis on placing the onus on credit bureaus, not consumers, to remove inaccurate information. If enacted, the bill would require agencies to notify consumers of negative information at least 90 days before it is reported. They could no longer simply dismiss your disputes as frivolous or irrelevant — and would have to devote an appropriate number of employees to investigate consumer complaints. The proposal would allow consumers to appeal disputes that the credit bureaus have already reviewed and rejected. In addition, the bill would require credit bureaus to clarify their dispute procedures so that consumers can more easily submit a dispute with the necessary supporting documentation. The data furnishers — or the companies reporting the inaccurate data — would need to maintain records to verify the accuracy of the disputed items.
The Information Reported to Credit Bureaus
The proposal also takes aim at the type of information reported to credit bureaus and how long it can remain on your credit report. The bill proposes to remove negative items from credit reports once the debts are paid or settled. Additionally, the changes would slash the amount of time a negative item can linger on your report, from seven years to four years, and reduce the bankruptcy scar from 10 years to seven. If you were the victim of a predatory lending practice relating to a mortgage loan, the bill would prevent any adverse information from showing up in your credit report. And the bill would extend the time before a collector can report a medical debt as unpaid — with a bonus of mandating that credit bureaus completely expunge fully paid and settled medical debt from your history.
How the Changes Could Impact You
If the consumer-friendly proposed overhaul were to take effect, it could spell big changes for your credit report. You would likely see a lift in your credit score faster, thanks to a shorter shelf life for derogatory entries. If your credit report contained any inaccuracies, the process to dispute that information would likely be much easier than it is now. With a more simplified and regulated dispute process, you’d have a much better chance of having negative and incorrect information removed. As it stands now, the process to dispute false information can take years and involve many failed attempts — which translates to more time contending with a lower credit score. The changes are comprehensive enough that there’s a chance you could clear up damaging or incorrect information before it even reached your credit report — a huge time-saver for all involved.
While the bill is still in the discussion draft phase, expect dialogue over the proposals to continue. The bill has arrived at a pivotal time in the wake of the data breach at Equifax, when Americans are increasingly anxious about the security of their personal information. Although the bill stalled when it was first introduced in 2017, the majority in the House of Representatives has since shifted to the Democrats — which bodes well for the bill’s reception this time around. There’s a decent chance the bill, once it’s officially proposed, could meet with significant support from both sides of the aisle. We will keep you posted as the bill continues its path toward official introduction.
Start Your Better Credit Life Today
While possible credit reporting reforms are certainly an encouraging development, don’t wait for the legislation to pass before you take action to improve your credit. Our pros specialize in disputing items with credit bureaus, and we know how to work with them to secure the results you want. Simply put, our methods work. Get started with your better credit life today, and set up a free consultation with us at Ovation Credit.