In March, it was announced that Equifax, Experian and TransUnion, the 3 major credit reporting agencies, would start holding public data to new standards (after July 1). Now, public record data must include consumers’ name and address, as well as their Social Security number or date of birth, to appear on their credit file, according to the Consumer Data Industry Association.
Before the Decision Was Made
In 2015, Equifax, Experian, and TransUnion settled a lawsuit by a group of state attorneys general who claimed that millions of consumers were hurt by inaccurate credit reports. The companies agreed to introduce changes aimed at reducing the number of “mixed files” and apply a number of procedural changes with the purpose of improving the accuracy of these reports. The final part of this agreement goes into effect on September 15.
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The agencies’ response to the above-mentioned was the National Consumer Action Plan, which is called to make credit information more transparent for consumers. Also, the plan doesn’t allow the agencies to include medical debts on credit reports until after 180 days to allow insurance payments to go through. Moreover, specially trained employees must be hired by the bureaus who’d deal with credit disputes and allow consumers to obtain an additional free credit report if they find an error on their free annual credit report.
What to Expect
Based on the analysis conducted in March by FICO, the most common provider of credit scores, the majority of people won’t see a major impact on their credit scores. A judgment or tax lien will be removed from the credit files of nearly 7% of people with FICO scores, or nearly 15 million of the 220 million Americans with scores.
Public records such as bankruptcies, tax liens, and civil judgments won’t be removed from credit reports for 7 years. However, the majority of people having items removed will experience score increases of less than 20 points, according to FICO.
The agencies are going to provide updated information on public records at least every 90 days.