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A newly introduced bill could significantly alter the way Americans’ credit data is stored, reported and utilized by credit reporting agencies. Yesterday, Representative Maxine Waters, D-CA, introduced the “Comprehensive Consumer Credit Reporting Reform Act of 2016” which aims to transform the American credit reporting system in an attempt to make it “fairer, more accurate, and less confusing for consumers.”
Credit reporting agencies are tasked with keeping credit files for approximately 200 million Americans and Waters’ office claims that 40 million of these files contain imprecise information which consumers have a arduous time correcting. The effect of an error in a person’s credit cannot be overstated; credit affects everything, from renting an apartment to buying a home, a car and even something as minor as a television.
“We’ve all heard the horror stories about the serious problems with credit reporting practices that unjustly restrict so many people’s economic opportunities,” Waters stated in Thursday’s introduction. “But I believe it is also time to shine light into the mysterious ‘black boxes’ that generate credit scores and give victims, who are saddled with poor credit because of predatory and unfair practices, the chance for a fresh start.”
“Comprehensive Consumer Credit Reporting Reform Act of 2016” Benefits:
• Decreases the time unfavorable credit information remains on a consumer’s credit report to four years
• Requires the removal of paid and settled debts within 45 days
• Allows victims of predatory practices by servicers or mortgage lenders to have harmful information regarding mortgage loans removed from their credit reports
• Changes the dispute process, tasking creditors and credit reporting agencies, not consumers, with verifying the correctness of credit report information
If passed by Congress, this legislation would provide a huge help to millions of Americans who currently find themselves restricted by troubled credit histories. People would find themselves in better positions to buy homes, cars, and find better employment.
With their levels of poverty, this legislation could help single mothers and other women who need cosigners transition into homeownership. Homeownership can decrease poverty levels, provide stability, and safeguard these new women homeowners’ progress. This bill has the incredible potential to help people transition into better lives and could be the break for which millions of Americans are searching.
To read the bill in full, please click here.