Your Credit and the National Consumer Assistance Plan (NCAP)

Experian, Equifax, and TransUnion – the three largest credit reporting agencies – launched the National Consumer Assistance Plan (NCAP) in March to enhance accuracy, disputes, furnisher requirements, and overall customer service. These changes are predicted to be the biggest credit reporting adjustments since the Fair Credit Reporting Act was amended in 2011 to allow consumers the right to access a free credit report once a year from each of the three main credit bureaus.

The discussion between the three credit agencies was led by New York Attorney General Eric Schneiderman and aimed to change accuracy issues not addressed in the Fair Credit Reporting Act. According to the Consumer Data Industry Association, the NCAP surpasses what state and federal law requires from the bureaus. So, you can guarantee to see some changes in policies and procedure.

These changes are important because they can impact your ability to start a business, buy a house or car, and get a good education. It might come as a shock to hear that 5% of credit reports contained errors serious enough to affect a consumer’s interest rates. The NCAP also focused on addressing medical debts and restructured when those debts can be reported to add time for processing of insurance claims.

Here’s what you need to know about the National Consumer Assistance Plan according to the Consumer Data Industry Association (CDIA):

Debt Reporting

For medical bills, there will now be a 180-day waiting period between the time an account is created and the time it can be recorded on a credit report as due for collection.

  • What this means for you: Your three nationwide credit reporting agencies are acknowledging your basic need of medical care and the associated costs.Insurance claims can take months to process, and medical institutions reporting to the bureaus too early muddy the accuracy of a consumer’s credit history. A longer waiting period gives insurance companies time to process payments, and gives consumers and medical providers time to resolve insurance payments and other billing situations before affecting your score. According to prnewswire.com, the other great news is that any previously reported medical collections that have been or are currently being paid by your insurance company will be removed from your report.

Consumer debts that did not arise from a contract or other agreement by the consumer to pay, such as traffic tickets or government fines, will no longer be eligible for recording on credit reports.

  • What this means for you: Such information will no longer be visible to a potential authority looking to evaluate your credit.

Disputes

Consumers who receive their free annual report – which is available to every consumer at annualcreditreport.com – and discover an error that they successfully dispute will now be able to obtain a second report at no charge.

  • What this means for you: The credit agencies, according to the Fair and Accurate Credit Transition Act passed in 2011, are required to provide you with one free credit report a year so that you can review your credit history. Until now, repaired errors made on the part of furnishers (companies reporting your information to the bureaus) could not be reviewed for free. With The National Consumer Assistance Plan, any errors corrected on your report makes you eligible to review the changes at no cost to you.If you are dissatisfied with the results of the investigation of your dispute, you should notify the Bureau in question - The NCAP also requires that you be given information about further options to correct these errors.

The CRAs are focusing on an enhanced dispute resolution process for consumers that are proven victims of fraud or identity theft, as well as those involved in mixed files – a situation where two consumer files are mistakenly mixed together.

  • What this means for you: Simply put, if you are a victim of fraud or identity theft, there are additional measures built into the Plan to repair the damage done to your credit so that you are the only one responsible for your credit history.

Experian, Equifax, and TransUnion have pledged an increased quality of consumer experience. For more information, watch this public announcement from Craig Boundy, CEO of Experian North America.

  • What this means for you: If you need to contact the bureaus regarding your credit report, you can expect “more live agents, and increased bilingual support for Spanish speaking consumers” in addition to “a secure document uploading process.”

Higher Standards for Data Furnishers

Credit bureaus will be required to reinforce consistent reporting standards upon furnishers. For more information, read this post from prnewswire.com.

  • What this means for you: According to Jeremy Marcus Finance, furnishers will be monitored closely so that your credit report is as precise as possible. In addition, they are now required by the NCAP to provide more information than ever when you file a dispute against your credit report. That means a more accurate report for you and in turn, a score that more fairly represents your credit history.

Data furnishers will be prohibited from reporting authorized users without a date of birth and the CRAs will reject data that does not comply with this requirement.

  • What this means for you: Without your date of birth, companies cannot report any information to the bureaus. This is a further step to protect you from fraudulent activity and identity theft, and to keep your private information private.

Credit report accuracy has been improved 90% over the last two years, and it will continue to climb as these changes are enacted, according to Boundy. Hopefully, American consumers will see many of these changes in their credit reports over the next year so that they will have access to better credit and, of course, better futures.