A new agreement will change the way your credit behavior is treated. Your credit score is a three-digit number that tells you how you will be rated the next time you apply for a loan or a credit card. It is that simple.
The highest score is 830. People who are behind in payments to banks, credit cards or other lenders will have lower scores. People who are better payers get higher scores.
There are three credit bureaus that supply lenders with credit scores:
There have been many complaints from consumers about errors in the credit bureau records. These disputes are outsourced by credit bureaus to workers overseas.
The consumer tells her side of the story. A code number is generated to reflect the adequacy of the explanation. The code number along with other information is sent to the credit bureau. If the explanation is confirmed, the contact is over.
It is now up to the lender or credit card company to make the correction. Often, this does not happen.
A new day is ahead. The three credit bureaus have agreed to make major changes. They will now use trained employees to review the complaints. They will inform consumers that they can get their credit scores for free once a year or when a change is made as a result of a dispute.
Another big issue is bad credit ratings due to a dispute over medical bills. The bureaus will now have to wait 180 days to list unpaid medical bills in their reports. They will also reduce the weight of medical bills in arriving at their ratings.
The credit bureaus will make these changes known to consumers.
Your credit score is the result of many factors. Timely payments are only one of them, but it is a very important one.