New bill would overhaul credit reporting system, remove debt after 4 years

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New bill would overhaul credit reporting system, remove debt after 4 years
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If you’ve ever had to go through the hassle of trying to remove inaccurate information from your credit report, then you’ll want to know about a new bill.

Representative Maxine Waters, a member of the U.S. House Committee on Financial Services, just unveiled the “Comprehensive Consumer Credit Reporting Reform Act” to fix the broken credit reporting system, according to Consumerist.

Read more: 5 sneaky ways to increase your credit score

Revamping the credit reporting system

The new measure would require consumer reporting agencies and those that provide information to them to make sure that you aren’t penalized for things on your credit report that just aren’t true or are outdated.

Credit bureaus Equifax, Experian and TransUnion receive complaints from people all the time about this very issue.

According to Consumerist, here are some key things this bill would do:

  • Disputes: Establish standards to improve accuracy of reporting and give consumers the right to appeal initial reviews of disputed items.
  • Decreasing time on a credit report: Shorten the period that adverse information can remain on a credit report by three years.
  • Bad mortgages: Provide relief to borrowers who were victimized by predatory mortgage lenders and servicers.
  • Student loans: Give distressed private education loan borrowers the same chance to repair their credit as federal student loan borrowers.
  • Medical debt: Restrict how medical debt appears on credit reports.

Read more: How to fix errors on a credit report

Why your credit score matters

Having an accurate credit picture is important for many reasons. Banks use this information to determine rates, potential employers might check it and insurance companies rely on it to determine your rates.

How to access your credit report

The good news is that you are entitled to get a free copy of your credit report annually at AnnualCreditReport.com. Be sure to check it over carefully to make sure that all of the information is correct.

Credit Karma and Credit Sesame also give you a way to check your credit score.

Read more: How a small unpaid bill can destroy your credit score

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Michael Timmermann paid off his mortgage in two years. Now, he shares his money-saving tips on his blog, Save on Almost Everything.
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