February Fair Credit Reporting Act News

A story recently came out that lawmakers are interested in changes to the Fair Credit Reporting Act (FCRA) and it shows how the Act may evolve. The Yahoo story on the current bill in Congress reports:

The bill would require credit reporting agencies (CRAs) to remove negative comments for private student loan borrowers after completing rehabilitation, prevent employers from using credit scores in hiring decisions, and eliminate medical debt from credit reports once paid. The bill also plans to improve the credit dispute process.

Medical debt and student loan debt are two massive areas that cause confusion and potential trouble for consumers. Removing paid medical debt could be a huge benefit for consumers since most medical debt arises out of necessity.

Another proposal:

First, the bill highlights changes it wants to make to the dispute process. The proposal directs credit reporting agencies – the three main ones are Transunion, Equifax and Experian – to extend the period of reinvestigation by an additional two weeks, with exceptions being made for instances where information needed in the dispute is found to be inaccurate or incomplete. The bill also requires CRAs to notify information suppliers — the agencies that provide the information found in your credit report — of a dispute within five days. CRAs would also have to notify a consumer of the results of a reinvestigation within five days.  

The dispute process is the area that probably needs the biggest overhaul. However, I don’t think more time is going to have a large positive impact on the process.

Overall, it is a good sign that lawmakers are reviewing the Act and are interested in making changes that result in better accuracy and fairness.