The three leading U.S. consumer credit reporting agencies agreed to make sweeping changes to correct errors and improve accuracy of reports as well as to increase protection for consumers with medical debt.
Equifax Information Services LLC, Experian Information Solutions Inc. and TransUnion LLC made the agreement with New York Attorney General Eric Schneiderman, set to be announced Monday. Combined, the companies maintain credit information for about 200 million U.S. consumers.
Credit reports provided by the agencies are used to assign numerical scores on which lenders rely to help determine whether to issue loans to consumers and at what interest rates.
"This agreement will reform the entire industry and provide vital protections for millions of consumers across the country," Schneiderman said in a statement.
Under the deal, the agencies will employ trained staff to review consumer complaints about possible errors, fraud or identity theft, Schneiderman said. Previously, disputes were sometimes handled through automated processes with minimal investigation, he said.
The agencies will also institute a 180-day waiting period before medical debt would be reported in order to permit time to resolve delinquencies related to potential health insurance coverage disputes or payment delays, Schneiderman said.
The reforms will be phased in over a three-year period, he said.
In 2013,the Federal Trade Commission found that 5 percent of consumers had errors on one of their three major credit reports that could lead to them paying more for products such as auto loans and insurance. Four out of five consumers who filed disputes with the credit reporting agencies experienced some form of change to their reports, the FTC said.
The companies said today in a joint statement provided by the Consumer Data Industry Association that they are launching what they are calling a National Consumer Assistance Plan to enhance their ability to collect complete and accurate information and provide transparency to consumers. The plan stemmed from "cooperative" discussions with Schneiderman's office, the credit reporting agencies said.
"While all three nationwide credit bureaus have been and continue to operate in compliance with the applicable federal and state laws, we have never hesitated to go beyond the letter of the law to voluntarily improve the existing credit reporting environment," the group representing the credit reporting agencies said in the statement.