Is Change Coming to the Credit Reporting Process?

Is Change Coming to the Credit Reporting Process?

As you might already know, there are three primary companies responsible for credit scoring: Experian, Equifax and TransUnion. All three are private companies and their scoring methods, although very similar, do have some differences that result in a variance of scores between the three.

Many in Congress are now calling for a complete overhaul of the current credit scoring system and a move to a system that is run by a governmental agency.  If this happens, we can expect to see other changes as well.  Some of the proposed modifications are:

  1. Incorporating rent and utility payments into credit scoring.
  2. Prohibiting scores from being used for purposes other than loan or credit qualification (this would prevent credit scores from being used for things like employment applications).
  3. Reducing the amount of time that negative credit items can remain on your credit report.
  4. Prohibiting derogatory information that is a result of the Coronavirus pandemic.
  5. Placing limits on the reporting of medical debt.

Would the proposed changes be good or bad, and when would they go into effect?

At this point, it’s hard to say.  There are potential advantages of some of the changes, but skeptics point to the fear of inefficiency of a government agency managing credit scoring rather than privately held companies.

There are bills currently proposed that could initiate this change but as we all know, the wheels of Congress do tend to move slowly when it comes to matters such as this.  So while we don’t have all of the answers now, Dedicated Credit Repair will keep you informed and provide updates whenever new information becomes available.

If you have any questions or need assistance, feel free to contact our office.