Consumer Reporting Agencies (Equifax, Experian, Transunion) have promised New York Attorney General, Eric Schneiderman, to improve the credit-reporting dispute process and give more time to repay medical-debt delinquencies.
Under the settlement, announced on the front page of today's New York Law Journal, the credit bureaus will (or should) provide more meaningful information as to your rights if you don't like an answer given to your dispute. Before this settlement, the bureaus would provide blanket statements such as "Verified. No change."
In consumer-protection law, exercising your rights under the Fair Credit Reporting Act is critically important where credit scores determine such basic costs of living, such as mortgages, credit, home equity loans, insurance, employment, and housing. A bad credit score can even prevent you from getting a simple bank account.
"A bad credit report can make every one of these basic steps in American life difficult, or far too often, even impossible," Schneiderman said.
The settlement adds further protection for medical debt, which could cause the most damage to a consumer. Under the settlement, medical debts won't be reported until after a 180-day waiting period to allow time for an insurance payment to be applied.
Since August 2014, the Fair Isaac Corp., the company behind the well-known "FICO" credit score, decided to lessen the impact of medical debt on a credit score.
Collaborating with Mr. Schneiderman to make this settlement happen were the New York City Department of Consumer Affairs and the New Economy Project.
The credit bureaus, unsurprisingly were represented by high-powered law firms, Jones Day, Troutman Sanders, and Stroock & Stroock & Lavan.