President Trump signs bill making credit free for all

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Whether you see the dismantling of Dodd-Frank as a correction to over-regulation or as the gateway to the next recession, the effects of the new bill on credit reports and credit freezes can help. short term. To learn.

Changes to credit reports

On Thursday, May 24, President Trump enacted the Economic Growth, Regulatory Relaxation, and Consumer Protection Act – the administration’s first step in dismantling the Dodd-Frank regulations passed in the wake of the crisis. housing and the Great Recession.

Many of the provisions of the law target banking regulations, indirectly affecting consumers. However, there are some changes that relate directly to one of your most critical tools as a consumer – your credit report and the steps you can take to protect it.

Improved fraud alerts

Fraud alerts tell lenders that someone else may be trying to apply for credit on your behalf. Lenders should then take reasonable steps to verify the identity of anyone applying for credit on your behalf. To take preventative action, you can file an initial fraud alert with one of the three major credit bureaus (Equifax, Experian, and TransUnion). The office which receives the deposit will inform the other two offices.

Under current law, initial fraud alerts only last for ninety days. The new law extends them to one year. Initial fraud alerts are always free and can always be reapplied after the time has elapsed.

If you are a confirmed identity theft / fraud victim, you can place an extended fraud alert for up to seven years. It remains the same.

Free gels

When you apply a credit freeze, no potential creditor can access your credit report to establish a new line of credit, even if you are the one asking for it.

To apply for new credit, you must lift the credit freeze (“unfreeze” the account) before submitting the credit application and reapply the freeze once the new account is established. You must freeze your account at each of the three credit bureaus individually.

Currently, state laws govern the fees associated with each freeze or thaw. Typically, freezes / thaws are free for confirmed victims of credit fraud and range from $ 2 to $ 10 for other consumers. In some states, you could pay up to $ 30 for each freeze or thaw. The new legislation eliminates these fees, making the credit freeze free for everyone.

Critics note that by bringing the credit freeze policy under federal law, state laws with stronger protections can be preempted. The battle between state and federal oversight is likely to continue – but, in the meantime, most consumers will benefit from free credit freezes / thaws.

Credit protections for children have also been addressed in the new bill. A child’s identity theft is usually not detected until several years later, when a child’s credit is already ruined. Under the new law, representatives of minors aged sixteen and under can prevent theft by freezing their child’s credit free of charge. They can request that a file be made up for their child in order to freeze it, also free of charge.

These changes are expected to take effect in September – 120 days after the president signs the bill. To make sure you understand the provisions of your state’s laws and how they may change, contact your state’s attorney general’s office and any other state office responsible for consumer protection laws.

Other gear changes

Other credit bureau reporting changes are designed to make it easier to remove adverse information from your credit report.

You may be able to remove delinquent private student loans from your credit report if you participate in a loan rehabilitation program through your lender and make enough payments on time to demonstrate both willingness and the ability to repay the loan on time. point forward.

If you are a veteran with medical debt, the new law offers additional relief. Your medical debt can only be reported to the offices one year after the medical service has been provided. Under current law, the grace period for reporting is 180 days from the default of the medical debt. If you are a veteran with medical debt in collection, the debt should be removed from credit reports when the debt is paid, settled, or assumed by the Department of Veterans Affairs. (Typically, removal takes seven years under applicable law.)

If you are in active military service, you will also be able to sign up for free credit monitoring through the credit bureaus. Some sites already do it for free, but the new law requires the offer.

Takeaway meals

Whether you see the dismantling of Dodd-Frank as a correction to over-regulation or as the gateway to the next recession, the effects of the new bill on credit reports and credit freezes can help. in the short term – if you choose to use them.

Note that almost all legislative changes are passive. If you don’t use fraud alerts or credit freezes, the new rules will have no effect on you. Likewise, a lender will not remove a private student loan default from your credit report unless you ask to do so.

Good credit management requires action on your part. Regularly check your accounts and credit report for signs of identity theft or fraud. Quickly correct any mistakes you find with the credit bureaus. If any of these new provisions can improve your credit score, apply them at the earliest opportunity.

Finally, take advantage of fraud alerts or credit freezes that may apply to your situation. Either can cause slight inconvenience, but it is nothing compared to the misery of rebuilding your credit after criminals destroy it.

This article was provided by our partners at moneytips.com.

To find out more about MoneyTips:

What Identity Thieves Do With Stolen Credit Cards

Credit freeze against fraud alert

Photo © iStockphoto.com / Robertindiana

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