Maxine Waters, a California Democrat, has introduced a bill that
could bring welcomed change to your credit report. It has been a long
time since the original bill was passed and consumer spending habits and
use of credit have changed significantly since then. Let us take a look
at some of the proposed changes in the House Bill.
Credit
bureaus must delete collection items and late payments from a
consumer's credit report within 45 days of the debt settling or paying
in full. This is the biggest proposed change in my opinion and
could be welcome news to those with bad credit. You now would have the
ability to repair your credit score very quickly, within seven weeks of
settling debt that is on your report. Some industry experts worry that
savvy borrowers could game the credit system with this change. More on
this in a future article.
Bankruptcies can only appear on your credit report for 7 years, instead of the current 10 years. Many of the bills proposed changes revolve around shortening the length of time delinquent items appear on your report.
Debt Collections and late payments may only appear on your credit report for 4 years.
This is similar to the last proposed change in the sense that it is
reducing the amount of time the delinquency can be on your credit by 3
years.
Private student loans defaults must be removed after 9 consecutive payments made.
This is another biggie. If you can make 9 monthly payments in a row for
your student loan, then the default must come off your report because
you would be considered in good standing again.
Remove adverse actions from predatory mortgage lenders. If
you got one of those nasty predatory mortgages a few years ago and it's
still a blemish on your credit report, this bill acts to remove those
items from your credit report completely. It is not clear on what
mortgages would be considered predatory loans.
Require
creditors to maintain documents for negative items on your credit report
for as long as the item is on your credit report. This is will
not affect your credit so much until you have a dispute with a
creditor. They will now be required to maintain all the documents that
they used against you for as long as they are reporting the item on your credit.
The
bill was only introduced a month ago and I can already see the
arguments heating up. There are some items in this bill that the
creditors don't like but if even half the items where to be put into
law, you should see a bump up in your credit report. If you don't see
the bump right away, you would certainly get a bump soon
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