More credit-bureau data changes taking effect in September

We recently posted information about steps being taken to improve the quality of consumer data that the three major credit bureaus use to evaluate people’s creditworthiness. In that blog post, we explained that Experian, TransUnion and Equifax entered into a settlement with 31 state attorneys general called the National Consumer Assistance Plan.

Improvements already made

Pursuant to the settlement terms, steps to improve data quality and reduce errors have already been taken concerning:

• Tax liens
• Civil judgments
• Debts like traffic tickets or court fines not associated with personal contracts

Additional requirements

On September 15, three other changes will be implemented pursuant to the settlement. These provisions will impact certain reporters of data to the credit bureaus:

• Medical debt: Collection agencies and buyers of debt will have to wait to report an overdue medical bill until it has been late 180 days. This will give the bill time to first clear processing by medical insurers, which may pay all or part of the bill before the consumer is normally billed for the difference, if any. Collection agencies and debt buyers must follow up on medical debts previously reported to tell the credit bureaus if the bills have been paid or will be paid by insurance coverage.
• Consumer identification: When data is submitted to a credit bureau, the provider must include the consumer’s Social Security number, date of birth, full name and address. This should help prevent negative reporting from being associated with the wrong consumers.
• Authorized users: When information about an authorized user of a new or pre-existing credit card account is sent to a credit bureau, the user’s full birth date must be included.

These changes are likely to impact many of our clients, who include both consumers and creditors.