Two Thumbs Up - Comprehensive Consumer Credit Reporting Reform Act of 2016

[Anonymous]

Forgive me if this has been discussed somewhere. I searched and did not find anything so I am introducing it for discussion.  Please note that I read this on another site but I can agree to the issues addressed in it and hope that it would pass in congress.  The bill introduced by Rep. Maxine Waters  is the  202-page Comprehensive Consumer Credit Reporting Reform Act of 2016. This would help many, many consumers in cleaning up their credit reports.  I assume that creditors might not like it much but i give it two thumbs up  What are your thoughts?  Do you love it or hate it? We as consumers can use all the help we can get. Hopefully congress will give it careful consideration.

[Anonymous]

I haven't read the whole thing, just the high points. But, at the very least, the thing about baddies disappearing aftter 4 years and paid negative accts disappearing after 45 days is MUCH NEEDED reform.  For this alone, I hope the bill has a shot of passing.  It is utterly ridiculous that someone is punished so severely and for so long (credit-wise) for going through a rough patch financially and maybe having no choice but to let some accounts lapse.  I know there are those that are in a constant cycle of unpaid accts, etc and this would not really impact those people since the  negatives would still stay on for 4 years.  

But, for those (yes, like myself), who had no options 6.5 years ago but to allow some credit card accounts to charge off, but who has paid all of that back and has had perfect history since,  it is insane that I still have to wait a year for eveything to fall off and for my credit socres to rebound. Not only that, but I have to wait a year before I can even consider buying a house. I am in a MUCH BETTER financial situation now but, because my scores are still so low due to the all the old baddies still reporting, I have literally not shot at anything other than a couple Cap One accts and SCT accounts.  Seven years is entirely too long to punish someone. It's a long time, it's practically a decade, and it gives no options for people ot try and re-build.  You can't re-build if you can't prove your credit worthiness for seven years after a few mistakes.    

IF this even passes, it won't help me out since all my baddies will start to fall of this year and will be gone by this time next year.  But, the whole CRA system needs to be reviewed and revamped so I am in favor of anything that does that.  

[RonM21]

The baddies disappearing early caught my attention also

[JagerBombs89]

Of course, FICO may tweak their algorith to punish you MORE for those four years, since baddies would drop after that four year mark.  Food for thought.

[CreditDunce]

Sure baddies would drop off after 4 years.  But positive info would be dropped after 4 years, too.  The CRA's aren't going to keep useless info if everything after 4 years is whitewashed.  With less history to work with, credit scores will not be as accurate in predicting defaults.  Lenders will demand more interest to compensate for the increased uncertainty/risk.  Anyone who carries a balance will pay more.

As it is now, you can qualify for a mortgage after about 2 years after a BK.  People with baddies are approved for mortgages all of the time.  They pay more in interest, though.  I do think people who pay back their baddies shouldn't be penalized as much.  That is the way FICO 9 is moving.  However, it will take updating Fannie/Freddie regs before the more modern FICO models are used for mortgages.

[surferchris]

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@Anonymous wrote:

I haven't read the whole thing, just the high points. But, at the very least, the thing about baddies disappearing aftter 4 years and paid negative accts disappearing after 45 days is MUCH NEEDED reform.  For this alone, I hope the bill has a shot of passing.  It is utterly ridiculous that someone is punished so severely and for so long (credit-wise) for going through a rough patch financially and maybe having no choice but to let some accounts lapse.  I know there are those that are in a constant cycle of unpaid accts, etc and this would not really impact those people since the  negatives would still stay on for 4 years.  

But, for those (yes, like myself), who had no options 6.5 years ago but to allow some credit card accounts to charge off, but who has paid all of that back and has had perfect history since,  it is insane that I still have to wait a year for eveything to fall off and for my credit socres to rebound. Not only that, but I have to wait a year before I can even consider buying a house. I am in a MUCH BETTER financial situation now but, because my scores are still so low due to the all the old baddies still reporting, I have literally not shot at anything other than a couple Cap One accts and SCT accounts.  Seven years is entirely too long to punish someone. It's a long time, it's practically a decade, and it gives no options for people ot try and re-build.  You can't re-build if you can't prove your credit worthiness for seven years after a few mistakes.    

IF this even passes, it won't help me out since all my baddies will start to fall of this year and will be gone by this time next year.  But, the whole CRA system needs to be reviewed and revamped so I am in favor of anything that does that.  

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Agreed.  The other issue with having negatives on so long, is that you can't find employment since everyone runs credit, even for bs $10 per hour call center jobs.

[Thomas_Thumb]

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@surferchris wrote:

 Agreed.  The other issue with having negatives on so long, is that you can't find employment since everyone runs credit, even for bs $10 per hour call center jobs.

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Your history is out there regardless of the CRAs and Fico. The state I work in mandates that employers must give employees copies of background check results if requested.

I saw some interesting (and inaccurate) reports. None of these summaries even remotely looked like a CRA report. The scoring of America will NEVER be legislated effectively. It is a rogue operation. You will be scored, categorized and sold. 

[surferchris]

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@Thomas_Thumb wrote:

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@surferchris wrote:

 Agreed.  The other issue with having negatives on so long, is that you can't find employment since everyone runs credit, even for bs $10 per hour call center jobs.

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Your history is out there regardless of the CRAs and Fico. The state I work in mandates that employers must give employees copies of background check results if requested.

I saw some interesting (and inaccurate) reports. None of these summaries even remotely looked like a CRA report. The scoring of America will NEVER be legislated effectively. It is a rogue operation. You will be scored, categorized and sold. 

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LOL...you are probably depressingly correct.  And so begins the next step towards our dystopian society (credit have's vs credit have-nots).

[Revelate]

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@surferchris wrote:

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@Thomas_Thumb wrote:

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@surferchris wrote:

 Agreed.  The other issue with having negatives on so long, is that you can't find employment since everyone runs credit, even for bs $10 per hour call center jobs.

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Your history is out there regardless of the CRAs and Fico. The state I work in mandates that employers must give employees copies of background check results if requested.

I saw some interesting (and inaccurate) reports. None of these summaries even remotely looked like a CRA report. The scoring of America will NEVER be legislated effectively. It is a rogue operation. You will be scored, categorized and sold. 

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LOL...you are probably depressingly correct.  And so begins the next step towards our dystopian society (credit have's vs credit have-nots).

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To add to what TT suggests, there's little incentive now to ever throw any data away that a lender gets: there will just be more storing of old credit reports if this goes through and more internal databases being built up.

FICO only goes so far, and sure that helps the mortgage market since it's pretty well regulated (though it could change, albeit at glacial speed), for everything else which doesn't have the same regulations, don't expect old negatives to be utterly gone: FICO is only one part of the UW process now,  if this goes through it'll likely be devalued by major lenders at least.  If I get a tax lien or default on a loan, it's supposed to hurt. /shrug.

Some other types, medical debt for example is laughable at this point with how wretchedly complex and in some cases terrible our healthcare billing systems and practices are; however, the market is already addressing that and while I haven't read this most recent bill (I saw the old one which was too pie in the sky for my taste) I'm awfully leery of unintended consequences.