Changes to Credit Reporting

Credit Reporting Changes – Effective by June 8, 2018

Pursuant to a 2015 settlement between the New York Attorney General and the three credit reporting agencies, important changes are on the way to consumer credit reports.  An additional agreement between the three credit reporting agencies and another 31 state attorneys general ensure the changes will be nationwide. The changes are being made in three phases with the most significant and final phase which must be implemented by June 8, 2018.

The most momentous impact for the largest number of consumers concern medical collections:

  • The credit bureaus – Experian, Trans Union and Equifax must reject any report of a collection that is not at least 180 days old. Thus, giving the insurance company or consumer time to pay the bill before it is reported as a collection account.
  • Medical collections which are paid, or which are being paid through insurance will be removed or suppressed from credit reports.
  • Collection accounts which have not been updated on the report for six months must be removed or not factored into the scores.
  • The credit reporting agencies will remove any collection that did not arise from a contract or agreement to pay by the consumer. This includes, among other items, collections for traffic and parking tickets or library fines.

This will have a substantial impact on a consumer’s credit scores. Any collection account will negatively impact a consumer’s credit score by at least 100 points. Not having those collections factored in or having them removed provides opportunities for many consumers that could not previously qualify for home or vehicle loans as well as credit cards. This will also help consumers obtain lower insurance premiums, allow for greater employment opportunities* and possibly even better romantic matches.

Authorized user(AU) accounts are also affected. The credit bureaus will not allow AU accounts to be reported unless the date of birth of the AU is provided by the creditor. So, going forward, anyone adding an AU to their credit cards will need to supply the user’s date of birth before it will be reported on their credit report.

The bureaus must now communicate with each other regarding mixed files. If one of the credit reporting agencies receives a dispute from a consumer that their file is mixed, the credit bureaus must now use specially trained staff to communicate and globally correct the problem.

The credit reporting agencies can no longer reject a consumer’s second dispute of any account because they had a previous dispute of the account in the last three years. This does not apply to disputes made by credit repair organizations (CRO) on the behalf of a consumer. CROs are infamous for entering multiple disputes for consumers on the same accounts monthly.  All but the first dispute made by a CRO will be rejected.

All changes will be implemented on all scoring models and must be in place by June 8, 2018. These changes are long overdue and will have positive impact on thousands of consumer reports.

*Colorado prohibits the use of credit reports in determining employment eligibility with certain exceptions.

Image attribution

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | February 19, 2018

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only. You may use this information in whole and not in part providing you give full attribution to James Spray.

Timeline: Bankruptcy to Mortgage Chart

Experiencing a severe credit event such as foreclosure, short-sale, deed-in-lieu of foreclosure or bankruptcy does not mean you will never be eligible to get a home loan. This chart provides the time-out periods required by event. The assumptions are that you have established acceptable credit scores and meet underwriting guidelines. In certain circumstances, one may qualify for a mortgage upon discharge of a Chapter 7 or during a Chapter 13.

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | Originally published in 2010 and updated regularly | September 19, 2017 Contact me to obtain a pdf copy of this chart.

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct for your situation. This information is not legal advice and is for guidance only. You may reproduce this information in whole and not in part, providing you give full attribution to James Spray.

145,500,000 American ID’s at Risk – 3rd UPDATE 02/08/2018

Credit Bureau Breached – 143,000,000 American ID’s at Risk – Use The Below Links

identitytheft (1)

Equifax, one of the major credit reporting agencies in the United States discovered their security systems have been breached.

Social Security, Driver License, Dates of Birth, Addresses and other personal information has been stolen.

This effects about half the population of the USA.

See if your personal information is potentially impacted. Schedule now to see if your ID has been compromised. There is no cost to you. Register now, there is a lag time. Many others are also registering.

Although it is a huge pain in the posterior (both to implement and to deal with when you apply for credit) I am now placing a freeze on my credit, too, with each of the four credit bureaus.

Equifax Freeze Link

TransUnion Credit Freeze

Experian Credit Freeze


The downside is having to remove the freeze whenever you wish to apply for new credit, obtain insurance or in some cases get a new job. Another downside is having to pay to release the freeze for a specific purpose or to have it removed. And there are the new PIN numbers to keep safe. Aaarg.

It is actually rather easy to set up a freeze on your credit files with the three bureaus. I don’t think this can be said for the “free” credit report/free credit score sites. Frankly, I don’t think you can do anything to protect your information once it is provided to the “free” service provider.

Frankly, if Equifax cannot keep my information secure, I am not about to provide my personal information to sites that offer free credit and free scores. I have never forgotten what Robert Heinlein wrote in 1966: TANSTAFFL.


UPDATE September 11, 2017

The following information was provided to me this morning by EQUIFAX pursuant to my registration to determine whether my ID had been compromised.

A Progress Update for Consumers

September 11, 2017

We are committed to keeping consumers updated on the steps we are taking to provide them with the support they need and address any issues they are facing in response to this incident. We recognize that some consumers continue to face challenges and in response we have made the following updates:

1) Adjusted our PIN Generation for Security Freezes
We understand and appreciate that consumers have questions about how a PIN is currently generated for a consumer initiating an Equifax security freeze solution. All consumers placing a security freeze will be provided a randomly generated PIN.

2) Call Center Support
When we recognized that Hurricane Irma could impact some of our call center wait times, we arranged to ramp up agents quickly to replace agents impacted by the storm and updated our website to make consumers aware of the situation.

3) Clarification Regarding Automatic Sign-Up to TrustedID Premier
We are not requesting consumers’ credit card information when they sign up for the free credit file monitoring and identity theft protection we are offering to all U.S. consumers. Consumers who sign up for TrustedID Premier will not be automatically enrolled or charged after the conclusion of the complimentary year of TrustedID Premier.

4) Obvious Link from
To make it easier for consumers to find the website dedicated to providing information about this incident, we have reconfigured our website,, to feature the link more prominently.

5) Adjusted the TrustedID Premier and Clarified
We’ve added an FAQ to our website to confirm that enrolling in the free credit file monitoring and identity theft protection that we are offering as part of this cybersecurity incident does not waive any rights to take legal action. We removed that language from the Terms of Use on the website, The Terms of Use on do not apply to the TrustedID Premier product being offered to consumers as a result of the cybersecurity incident.

We are listening to issues consumers have experienced and their suggestions. These are helping to further inform our actions, and we are now sharing regular updates on this website. Thank you for your continued patience and feedback as we continue to improve this process.

Following are the snips I gathered while enrolling in the EQUIFAX Trusted ID this AM.

Equifax JS ID Compromised

My ID has been impacted

Equifax JS Enrolled in Trusted ID

For better or worse, this is what it is.

UPDATE: Here is an article from Mawlwarebytes, published on September 14, 2017, which offers additional insights into identity protection: Equifax aftermath: How to protect against identity theft 

UPDATE 10/3/2017: Here is an article from HousingWire updating (increasing) the number of consumer files breached: EQUIFAX reveals data breach bigger than first thought. Fret not, Equifax won the NO BID contract to protect all IRS files from being hacked. Seriously. I can’t make this up. For more info you may read this from NPR.

Never too late to join the party, the FTC weighs in as of December 13, 2017 with this post: Fraud Alert, Freeze or Lock after Equifax? FAQs

February 5, 2018 – “The Trump administration has chosen to protect Equifax while denying Americans justice and accountability.”

February 6, 2018 – U.S. Treasury Secretary Steven Mnuchin on Tuesday said he wants to know how the Consumer Financial Protection Bureau is handling a probe into a hack of credit bureau Equifax Inc (EFX.N) after a report that the agency’s chief has pulled back from investigating the matter. Treasury’s Mnuchin says he wants answers on Equifax breach

February 6, 2018 – Consumer Affairs – Report claims CFPB is backing away from Equifax probe – Sources say the consumer agency shows little interest in the agency’s 2017 data breach

February 8, 2018 – Democratic senators demand answers on CFPB’s stalled Equifax data breach investigation

Image attribution(top)

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | September 8, 2017

Notice: The information on this blog is opinion and information. When a business is named, it is not due to commercial purposes as I do not accept or solicit compensation from any individual or entity which may be mentioned. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only. You may use this information in whole and not in part providing you give full attribution to James Spray.


Obsessives Have Cracked the Perfect FICO Credit Score of 850 – Bloomberg

Kudos to Suzanne Woolley for authoring an article which accurately portrays how one can improve their credit.

Source: Obsessives Have Cracked the Perfect FICO Credit Score of 850 – Bloomberg

Don’t Risk Your Credit Score In Retirement – WBRC FOX6 News – Birmingham, AL

Cancelling infrequently used credit cards may seem like a good strategy, but your credit score may be adversely affected. Adam Carroll, Founder and Chief Education Officer of National Financial Educators, explains: “When you have a long-standing trade line, which is what a credit card is considered on your credit report, and you cancel that card for whatever reason, your score will actually go down as a result because one of the main impacts on your credit score is the length of credit history.” A shorter credit history translates to higher risk in the eyes of lenders.

Sean McQuay, Credit and Banking Expert at NerdWallet, agrees but includes another reason to keep older cards, noting that closing a card account results in “decreasing your overall credit line, which basically signals that a bank trusts you less.”

In addition to decreasing your overall credit line, closing an infrequently used account raises your credit utilization your total credit in use compared to your cumulative credit line. High credit utilization suggests a greater chance of falling behind on payments and/or defaulting on debts.

To avoid these pitfalls, make periodic small purchases on all your open credit cards to keep them active and pay the balances in full at the end of each billing period. By keeping credit spending low, you can still address debts while getting the full benefits of your credit account.

It’s okay to concentrate most of your credit spending in one account to maximize rewards. Just use alternate accounts often enough to keep them from being closed for lack of activity.

Source: Don’t Risk Your Credit Score In Retirement – WBRC FOX6 News – Birmingham, AL

Equifax, Experian and TransUnion launched a new website, per NY Atty Gen Agreement

News Release

JUNE 09, 2016

Equifax, Experian and TransUnion today launched a new website,, to inform and update consumers about implementation of the National Consumer Assistance Plan, an initiative launched by the three companies in March, 2015 to enhance their ability to make credit reports more accurate and make it easier for consumers to correct any errors on their credit reports.

“Providing both consumers and businesses with accurate, transparent credit reports is our first priority,” said Stuart Pratt, President and CEO of the Consumer Data Industry Association, the trade association representing the consumer data industry, including the three national credit reporting agencies. “The nationwide consumer credit reporting companies are making important changes to their procedures that will improve their ability to collect accurate information, and we want to make sure consumers know about the new options available to them.”

The National Consumer Assistance Plan is being implemented over three years, and the new website will serve as a vehicle for updating consumers about changes to their ability to interact with the nationwide consumer credit reporting companies.

Changes included in the National Consumer Assistance Plan include:

  • Consumer experience:
    • Consumers visiting, the website that allows consumers to obtain a free credit report once a year will see expanded educational material.
    • Consumers who obtain their free annual credit report and dispute information resulting in modification of the disputed item will be able to obtain another free annual report without waiting a year.
    • Consumers who dispute items on their credit reports will receive additional information from the credit reporting agencies along with the results of their dispute, including a description of what they can do if they are not satisfied with the outcome of their dispute.
    • The credit reporting agencies (CRAs) are focusing on an enhanced dispute resolution process for victims of identity theft and fraud, as well as those who may have credit information belonging to another consumer on their file, commonly called a “mixed file.”
  • Data accuracy and quality:
    • Medical debts won’t be reported until after a 180-day “waiting period” to allow insurance payments to be applied. The CRAs will also remove from credit reports previously reported medical collections that have been or are being paid by insurance.
    • Consistent standards will be reinforced by the credit bureaus to lenders and others that submit data for inclusion in a credit report (data furnishers).
    • 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.
    • The CRAs will eliminate the reporting of debts that did not arise from a contract or agreement by the consumer to pay, such as traffic tickets or fines.
    • A multi-company working group of the nationwide consumer credit reporting companies has been formed to regularly review and help ensure consistency and uniformity in the data submitted by data furnishers for inclusion in a consumer’s credit report.

The National Consumer Assistance Plan builds on other steps the credit bureaus have made in recent years to improve consumer’s ability to resolve issues related to credit reports. In 2013, the companies launched a process under which consumers can upload documents digitally to dispute how their lenders have reported their accounts to the credit bureaus.

The plan was launched after cooperative discussions and an agreement with New York Attorney General Eric Schneiderman and a group of other State Attorneys General.

Source: News Release

Do Credit Markets Watch the Waving Flag of Bankruptcy?   Liberty Street Economics

Personal bankruptcy is surprisingly common in the United States. Almost 15 percent of the U.S. population has filed for bankruptcy sometime over the past twenty-five years, based on my calculations using the New York Fed Consumer Credit Panel/Equifax (CCP). In 2015, roughly 800,000 debtors filed for bankruptcy, according to court records, representing 0.64 percent of U.S. households. One of the consequences for filers is a mark on their credit report—a bankruptcy “flag”—which indicates that the consumer has filed for bankruptcy.

This bankruptcy flag is visible to creditors and, according to the credit bureaus, hurts filers’ credit scores. To limit these effects, the Fair Credit Reporting Act restricts the length of time that credit bureaus can fly these flags on reports for each (personal) bankruptcy chapter: the flag for Chapter 7—in which debtors get a full discharge of (unsecured) debts after unprotected (non-exempt) assets are liquidated—must be removed after ten years, while the flag for Chapter 13—a partial debt repayment bankruptcy designed to help people keep their homes—is typically removed after seven years. For economists, the fixed timing of the flag removal (and the difference across bankruptcy chapters) gives us a laboratory to explore how the lifting of bankruptcy flags affects borrowers’ credit scores and credit outcomes, by comparing these outcomes directly before and after flag removal…

Source: Do Credit Markets Watch the Waving Flag of Bankruptcy?   Liberty Street Economics

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