National Consumer Assistance PlanDid you know that long-overdue traffic and parking tickets can go to collections, resulting in black marks on your credit reports? Or did you know that having overdue medical bills because of insurance delays could also make an appearance on your credit reports? To stop such incidents from impacting your credit, the three major credit reporting agencies in the U.S. (Equifax, Experian and TransUnion) agreed to a 2015 settlement with 31 state attorneys general which implemented the National Consumer Assistance Plan (NCAP). This initiative, meant to improve credit reporting accuracy, could affect what goes on your credit reports and what doesn’t. The settlement also requires the three nationwide credit bureaus to create standards for civil public records reporting (e.g., for bankruptcies, civil judgments, tax liens and more).

While it isn’t clear if all of the settlement’s aspects have been fully enacted or not (its website mentions that all aspects of the plan were supposed to be fully implemented by March 2018, but we’re unable to find a confirmation of this implementation’s finalization at this time), it’s important in the meantime to learn more about this plan, what it changes and how it could impact you.

More about the National Consumer Assistance Plan

After discussions between the three credit bureaus and 31 state attorneys general, the three major credit reporting agencies announced that they would be implementing NCAP to improve the accuracy of credit reports, increase transparency and make it easier for consumers to fix credit report errors, as detailed in a Consumer Data Industry Association (CDIA) press release dated May 20, 2015. While the “most recent comprehensive government study showed that credit reports are materially accurate 98% of the time … our goal is always to improve beyond even that high standard of accuracy,” the release states. Although this press release provides this statistic, numbers pertaining to credit report errors can get complicated and be difficult to calculate, as we’ve covered in a previous post. That said, addressing credit report errors is a big deal because credit reports are significant influencers when it comes to your chances at credit extensions, loan approvals, interest rates, apartment hunts and nearly every other aspect of life.

How NCAP impacts you

There are a number of areas that the National Consumer Assistance Plan addresses. Here are some of the changes that could potentially impact you:

Changes pertaining to reporting for civil public records

Based on information from the Consumer Financial Protection Bureau (CFPB), an aspect of NCAP that has been implemented pertains to the reporting for bankruptcies, civil judgments, tax liens and other civil public records. (Again, as mentioned earlier, it’s unclear if the rest of the plan has been implemented.) The change was enacted to create standards regarding reporting frequency and what personally identifiable information can go on credit records.

As of July 1, 2017, this aspect of the initiative mandated that all civil public records appearing on the three nationwide credit bureaus’ credit records need to have a name, address, social security number or date of birth. This aspect of the plan also requires credit reporting agencies to “refresh” the personally identifiable information every 90 days. According to the CFPB, after these changes were implemented, “all civil judgments and about half of the tax liens on consumer credit records were removed. In contrast, the number of reported bankruptcies remained virtually unchanged.”

You may see changes in your medical reports

Got overdue medical bills on your credit reports because of insurance delays? If so, this may become a thing of the past. Under the NCAP, the credit reporting agencies hope to erase medical collections that insurance is paying for or has paid for. In addition, this initiative, which became effective on Sept. 15, 2017, requires a 180-day “waiting period” before medical debts can be reported, giving more time for insurance payments to be applied.

Some debts will no longer appear on your credit reports

The plan will also eliminate the possibility of reporting debts made without your agreement (e.g., a contract) to pay. As such, certain traffic tickets, parking tickets and other fines should not be reported to your credit reports in the future.

Other reporting rules will change

Some other reporting rules will also change as a result of this plan’s implementation. Under this initiative, credit reporting agencies plan to reinforce consistent standards when it comes to the data that lenders and other parties submit for your credit reports. Furthermore, these data furnishers will be required to provide a date of birth when reporting “authorized users,” as a failure to do so could end in the rejection of the reported data.

Disputing items on your reports will be easier

If you’ve disputed errors on your credit reports before, you know that it can be a pain to do so. NCAP provides more resources and support to consumers disputing items on their credit reports, including the opportunity to get a free additional annual credit report if a disputed item is modified.

Victims of fraud get an enhanced dispute resolution process

Being a victim of fraud can certainly be gut-wrenching, so you can rest assured that NCAP is also addressing communications regarding credit report disputes. For example, the initiative includes a proposal for credit reporting agencies to extend “an enhanced dispute resolution process for victims of identity theft and fraud” and those with mixed files.

Not everyone is a winner under NCAP

Like most other plans and initiatives, it’s possible that the NCAP will not benefit everyone. For example, FICO noted that those with such errors or public record data likely have additional derogatory information on their credit reports, meaning removing such public record information will likely not impact their scores quite as much. Still, a lot of consumers will have peace of mind knowing that such information will not impact their credit.

Now that you know more about the National Consumer Assistance Plan and how it may affect you, learn more about how you can keep track of your financial health. Start by taking a look at our credit monitoring service reviews and credit monitoring blog.