National Consumer Assistance Plan Killing Credit Repair #2
National Consumer Assistance Plan
More great news coming out of the New York Attorney General’s National Consumer Assistance Plan. I am very excited about this, it is going to really change the landscape of how the credit reporting industry operates.
I think the most important thing about this agreement is the way they addressed medical debt. Medical debt is normally created as a result of a billing error then later showing up as a collection on consumer’s credit report.
What the New York Attorney General negotiated with TransUnion, Experian and Equifax is to not allow medical debt to appear on consumers credit reports for six months, in the past it was thirty days.
Now consumers have six months to figure out who has responsibility for the debt, before it will show up on consumer’s credit reports. It gives consumers time to resolve insurance disputes and eliminate the unjust credit score penalty that people suffer because of medical debt. Now with Obamacare, it has become much more complex. Six months to resolve any medical billing errors, it is the most important thing to come out of this agreement.
Although, that is not the only thing to come out of the agreement. Higher standards for reporting the data, that’s part of this, now that sounds a little vague. Currently collection companies can report information without having all the proper documentation. The Fair Credit Reporting Act requires the original agreement between the borrower and the creditor. Many times collection companies don’t have that original agreement. The repositories are now going to hold collectors to a higher standard.
Also has part of the National Consumer Assistance Plan, the repositories will no longer report debt without a contract. If a consumer had an overdue library fine or parking ticket many times that can show up on consumers credit reports two, three, or four years later. Consumers are often unaware of this type of debt and when it is sold to collection company it suddenly shows up on consumer’s credit report. That’s no longer going to be allowed, under the National Consumer Assistance Plan.
The last thing is regarding authorized user accounts. Credit providers must have the date of birth when reporting the authorized user information, another move to higher quality data. The National Consumer Assistance Plan coming out of New York for the entire country. It will be phased in over the next three years, another great win for consumers it’s really going to change the landscape of the credit industry.
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