Our credit reports are our financial reputations, and are for that reason very important. Unfortunately, mistakes and errors are far too common. Even though there is a well established process for people to correct errors in their credit reports, the Big Three credit reporting agencies have made the process frustrating and overly-bureaucratic for those who could not afford a lawyer. This was the subject of an investigation by the New York Attorney General that has now led to a settlement. http://www.nytimes.com/2015/03/10/business/big-credit-reporting-agencies-to-overhaul-error-fixing-process.html?_r=0.
As detailed in the March 10, 2015 report in the New York Times, Equifax, Trans Union and Experian will replace their largely automated (and frustrating) dispute resolution process with a staff of specially trained individuals. Most importantly, they have agreed to put a 6 month hold on adverse reports concerning medical bills. This is a recognition that these are more commonly the subject of a billing dispute rather than non-payment.
The AG investigation found that the existing process was often ineffective in correcting legitimate errors. Creditors reporting a bad debt were given deference in the investigative process, resulting in improper automatic rejection of claimed errors.
We hope these changes will make it easier for people to correct their credit reports. However, we still recommend that any inquiries and disputes be followed with a letter detailing the problem. If a proper correction does not occur within 30 days, a lawyer should be consulted.
We suspect that where an attorney gets involved, the response from the credit reporting agencies will be escalated to a higher level.
Annual monitoring of your individual credit report is always a good idea. (For New Jersey residents, a free credit report is available once a year through www.annualcreditreport.com) While no one can eliminate a truthful adverse credit record (at least until 7 years after it goes to “charge off” or collections), what is there should still be accurate. In fact, we recommend that our bankruptcy clients check their credit reports after a bankruptcy discharge to make sure that none of the discharged debts show anything other than a zero balance due.