Spotting an error on your credit report can be a crummy experience.
First, there’s the moment when your heart stops because you see that your credit score has plummeted since you last checked it.
Then there’s the tedious back and forth with the credit bureau as you try to get that error resolved.
The good news is that, while errors are still possible, the second part of the experience could get easier in the near future.
Why's that? The three major credit bureaus (Equifax, Experian and TransUnion) have just reached an agreement with New York State to improve the way they deal with errors.
According to The Wall Street Journal, under the new process, the credit bureaus must now use trained employees to review the documentation that consumers hand in when they believe there’s an error on their report.
And even if the creditor claims the information is accurate, a credit bureau employee must investigate further and resolve the dispute. In the past, credit bureaus sent about 85% of consumer disputes to the lenders themselves, instead of solving the issues internally.
This new process should make getting erroneous information corrected a much more seamless process for consumers.
And we’re talking about a lot of Americans. In fact, a 2013 study estimates that up to 42 million people may have errors on their credit report.
The agreement reflects over a year of discussions between the credit bureaus and New York State Attorney General Eric Schneiderman, who had received an influx of complaints from New Yorkers having trouble fixing errors.
But the changes, which should take effect sometime over the next six to 39 months, will apply to all Americans—not just New Yorkers.
What’s more, the credit bureaus have also agreed to alter the way they treat medical debt, a type of debt that’s increasingly plaguing American consumers.
Now, they will have to wait a 180-day grace period before posting any information about medical debt on consumers’ credit reports. And once medical debts are paid by an insurance company—at any time—the information must be removed.
These are important developments, given that medical debts often result when insurance companies delay payments—not simply because consumers failed to pay up.
If you haven’t recently reviewed your credit report for mistakes, “I’m too busy” isn’t a valid excuse. Sleuthing for errors takes just 10 minutes—and here’s how to get started.