Reforms in a proposed bill targeting the credit reporting industry could help consumers improve their credit faster and make it easier to dispute info on their credit reports.
Rep. Maxine Waters (D-CA), head of the House Financial Service Committee, introduced the draft bill last week for discussion. Some of the key reforms proposed in her Comprehensive Consumer Credit Reporting Reform Act of 2019 are aimed at …
- Reducing how long negative information stays on credit reports.
- Changing the error dispute process by shifting some of the burden off consumers.
- Requiring credit reporting agencies to remove certain debts from reports within 45 days of settlement.
- Limiting situations where job applicants could have their credit scores checked.
Want to know more?
Why does this matter?
Credit reports and scores can have a huge impact on people’s lives. They influence whether you can borrow money, how much and at what cost. Negative credit info might result in being denied a home rental, or even a job.
Many consumers find it difficult to figure out exactly what info has been reported to the three main consumer credit bureaus — Equifax, Experian and Transunion — or how to dispute incorrect information related to their credit accounts. Additionally, just one minor payment misstep — like a 30-day late credit card payment — can linger on a report and punish a consumer for seven years.
The credit bureaus collect Americans’ payment history info for everything from credit cards and personal loans to auto loans and mortgages, and then compile it to create credit reports.
What’s different about this new legislation?
Back in 1970, President Nixon signed into law the Fair Credit Reporting Act, which laid out regulations for how the three main credit bureaus should conduct business. It also gave rights to consumers for accessing their credit reports.
But there’s been growing interest in further regulating the industry, especially after the 2017 data breach at Equifax that exposed millions of Americans’ personal information.
Rep. Waters’ bill proposes some sweeping changes. Along with making it easier for consumers to dispute errors on their credit reports, the bill calls for prohibiting employers to use credit reports when screening job applicants, and giving the Consumer Financial Protection Bureau, or CFPB, more power to regulate the credit reporting industry.
What happens next?
The latest version of the bill is still in the discussion draft phase, meaning it may be a few months before it’s formally put forward as proposed legislation.
Once the bill is officially proposed, analysts believe the legislation — or some version of it — may be able to move forward in both the House and Senate, according to a report in The Wall Street Journal. In the Senate, banking panel chair Mike Crapo (R-ID) has expressed interest in industry reforms.
In the meantime, you can contact your representatives to make your voice heard on this issue.
Additionally, if you’ve noticed an error on your credit report and you’d like to file a dispute, you can go to the website of the bureau that has the incorrect data and file a dispute with them online (or get more information to file a dispute through other means). For an error on a TransUnion credit report, you can head over to Credit Karma’s Direct Dispute™ tool and we can help you through the process.