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 Under the agreement, set to be announced on Monday, Equifax
Information Services LLC, Experian Information Solutions Inc and
TransUnion LLC, will be more proactive in resolving disputes over
information contained in their reports.
The three credit-reporting agencies (CRAs) collect and provide
credit information on more than 200 million consumers in the United
States.
Credit reports provided by the CRAs are used to assign numerical
ratings called "credit scores," which help lenders determine whether
they should grant loans to consumers and at what interest rates.
According to the deal, medical debts will not be put on consumers'
credit reports until after a 180-day "waiting period" to allow
insurance payments to be taken into account. In addition, all
medical debts will be removed from a consumer's credit report after
the debt is paid by insurance.
 The settlement also requires the CRAs to institute several reforms
over the next three years, including giving consumers the right to
challenge inaccurate information in their credit reports by
initiating a dispute.
In disputes, the CRAs will be required to use trained employees to
review all supporting documents submitted by consumers who see an
error in their files.
"The nation's largest reporting agencies have a responsibility to
investigate and correct errors on consumers' credit reports. This
agreement will reform the entire industry and provide vital
protections for millions of consumers across the country,"
Schneiderman said.
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The three companies launched a plan on Monday and said the
implementation will begin over the next few months.
"The National Consumer Assistance Plan...will enhance our ability to
offer accurate reports and make the process of dealing with credit
information easier and more transparent for consumers," Stuart
Pratt, chief executive of the Consumer Data Industry Association,
the trade association that represents the three CRAs, said in a
statement.
The agreement follows several efforts to make consumers more
creditworthy. Last August, personal credit score provider FICO said
it would leave out or discount medical debt from its scores, which
would boost the credit record of many borrowers, while helping
lenders to better assess risk.
(Reporting by Shivam Srivastava in Bengaluru and Karen Freifeld in
New York; Editing by Anupama Dwivedi)
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