FORT SILL, Okla. (April 9, 2015) -- A new settlement between the three major credit reporting agencies and the New York Attorney General could mean relief to the one-in-five Americans with inaccuracies on their credit reports, especially those with medical debt.
These reforms include:
- More thorough dispute-handling for mixed files, fraud, and identity theft disputes;
- Prohibiting the credit reporting agencies from accepting a report that did not arise from any contract or agreement to pay, such as certain parking tickets and fines;
- Removal or suppression of reports regarding debt that has not been paid in full if not updated every six months; and
- Significant changes in medical debt treatment.
Reforms will be implemented on a rolling basis in the next six to 39 months. The reform that will help the most consumers involves medical debt.
The Consumer Financial Protection Bureau estimates that 43 million Americans have past-due medical debt on their credit reports, accounting for over 50 percent of all debt on credit reports.
Medical debt can be reported as a delinquency, even though the consumer is waiting for their medical insurance to pay the debt. The insurance companies can take months or longer to pay a claim, and by the time the claim is paid, the consumer's credit is already suffering.
Under the new reforms, medical debt delinquencies cannot be reported until the date of the first delinquency is at least 180 days old. The consumer has 180 days from the date of the first delinquency to pay the debt, either through insurance or personal payment. Even if your insurance does not pay within that time period, the report must be removed or suppressed if the insurance company pays in full later. These reforms must be fully implemented by June 6, 2018, but may be implemented earlier.
What can you do to monitor your credit?
First, you should check your credit report from each major agency: Equifax, Experian, and TransUnion. You are entitled to a free credit report from each agency annually. You can order your report by phone, online, or by mail. To order, call 877-322- 8228 or visit www.annualcreditreport.com http://www.annualcreditreport.com. You can also get your report by sending a written request. Each company has a toll free number that you can call for more information:
Equifax: 800-685-1111, www.equifax.com http://www.equifax.com
Experian: 888-397-3742, www.experian.com http://www.experian.com
TransUnion: 800-888-4213, www.transunion.com http://www.transunion.com.
You have the right to dispute the information on your credit report under the Fair Credit Reporting Act. The Fort Sill Legal Assistance Office can help.
How can I protect my credit?
You can add an Active Duty Alert or a Credit Freeze to your report by visiting the credit agencies' websites. An Active Duty Alert lasts for one year, and requires lenders to take additional steps to protect a Service member's identity. When you contact one credit agency and request an Active Duty Alert, that credit agency must contact the other two agencies. In addition, your name will be taken off the marketing list for prescreened credit card offers for two years.
A Credit Freeze restricts access to your credit report. To add, remove, or temporarily lift a Freeze, you will have to pay a fee that varies state-by-state. Existing creditors can still access your report, but new creditors cannot access your credit report. Because most creditors need to see your credit report before opening up a new account, this can help prevent new accounts from being fraudulently opened in your name.
Another way to protect your credit is to remove your name from the prescreened credit offer list. If you want to stop getting prescreened offers of credit, call 888-5OPTOUT (888-567-8688) or go online at www.optoutprescreen.com http://www.optoutprescreen.com. These services are operated by the nationwide credit reporting companies. You can opt out for five years or permanently.
Visit the Fort Sill Legal Assistance Office for more help at the Welcome Center, Building 4700 Mow-Way Road on the fourth floor, or call 580-442-5058/5059.
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