Credit Score

What is The Comprehensive Consumer Credit Reporting Reform Act?

The Fair Credit Reporting Act (FCRA), originally enacted some 45 years ago in 1970, serves as the chief federal law that regulates the consumer reporting agencies (“credit bureaus”) and protects the rights of people when it comes to credit reporting.

However, although the FCRA has undergone significant amendments in both 1996 (Consumer Credit Reporting Reform Act) and 2003 (The Fair and Accurate Credit Transactions Act), many consumer advocates, not to mention consumers themselves, feel the law still falls short of providing consumers with adequate protections.

Representative Maxine Waters (D-CA) believes another amendment to the FCRA is needed. In her words, “overhaul the American credit reporting system so that it is fairer, more accurate, and less confusing for consumers.”

Although the credit reporting system has already begun and will continue to undergo a major overhaul as a result of a settlement between the 3 major credit reporting agencies (Equifax, Trans Union, and Experian) and the New York Attorney General’s office, Rep. Waters believes additional more aggressive changes are still needed in order to properly protect the American public from what she refers to as the “predatory and unfair practices” currently being committed by the players in the credit reporting industry.

In May 2016 Rep. Waters introduced the Comprehensive Consumer Credit Reporting Reform Act of 2016 (H.R. 5282), a bill which proposes massive revisions to the current federal credit reporting protections and regulations provided for under the FCRA. The proposed changes in Water’s H.R. 5282 span a colossal 202 pages. (The entire FCRA itself including its previous amendments only boasts slightly over half that number.) While the bill is much too lengthy to fully dissect in one short article, some of the most notable proposed changes in Water’s H.R. 5282 include the following:

  • Requirement to remove paid or settled derogatory accounts from a consumer’s credit reports within 45 days of payment or settlement. These accounts would no longer be permitted to remain on credit reports for 7 years from the date of default on the original account (regardless of whether or not the account is later paid/settled) as is the current standard for credit reporting in these situations.
  • Requirements to reduce the amount of time that most types of derogatory items are permitted to remain on a consumer’s credit reports from 7 years to 4 years. (Bankruptcies would be permitted to remain on credit reports for a maximum of 7 years instead of the current 10-year maximum.)
  • Requirements of credit restoration for victims of predatory mortgage lending. That is to say that the credit reporting agencies would be forced to remove derogatory information pertaining to foreclosures or foreclosure-like events (i.e. short sales and deeds-in-lieu of foreclosure) if the mortgage lender was found by the courts or the Consumer Financial Protection Bureau (CFPB) to have been associated with any deceptive or predatory lending practices.
  • Requirement to introduce a loan rehabilitation option for consumers with private student loans similar to the current loan rehabilitation options available for consumers with federal student loans.
  • Requirement to empower the CFPB with the authority to regulate the development of new credit scoring models.
  • Requirement to grant consumers access to free annual credit scores in addition to the free annual credit reports consumers can already claim from

H.R. 5282 is not the first time that Rep. Waters has proposed legislation to amend the FCRA. In 2014 the California representative introduced the Fair Credit Reporting Improvement Act of 2014.

However, the bill failed to pass, and rightfully so, due to some significant problems with many of the proposed changes contained therein. Unfortunately for Rep. Waters, her newly proposed 2016 bill is likely doomed for a similar fate unless some major revisions occur due to some serious problems with the proposed legislation including, but certainly not limited to, the following:

1. The 45-day requirement to remove paid or settled debt is absurd. Dishonest individuals would be given a free pass to, for example, rack up a massive pile of credit card debt, allow the debt to go into default, and later settle for a much lower amount with no long term credit repercussions once the lower cost settlement was completed. It would be a glaring loophole simply waiting to be abused. If enacted this requirement alone could potentially serve to completely destabilize the entire credit scoring and lending environment as we know it.

2. The requirement to remove most derogatory information after 4 years is another glaring problem found in the new bill. Prematurely removing accurate, negative information about consumers who did not pay their bills according to the terms of their loan agreements would make it extremely challenging, if not impossible, for lenders to accurately predict and minimize risk when lending to new consumers in the future. In the past Mr. Waters has cited European countries when suggesting the reduction in years.

3. The CFPB overseeing the development of credit scoring models? That would assume the CFPB is qualified to do what so few companies have been able to do, which is to build ECOA compliant and generally accepted multi-bureau scoring systems. Only two companies have pulled that off…FICO and VantageScore Solutions.

About the author

John Ulzheimer


  • How about percentage of revolving credit used? My limits are dismally low, a joke, as I have credit cards for repairing credit. Don’t use them and you get dinged, use them too much, get dinged. Max them out and pay off in full, get dinged. No matter what you do you get dinged. My score just dropped 59 pts for using too much revolving credit, they make sure to report your balance before you pay. Every time you adapt, they adapt just to make sure they can get you for something negative. They want to keep you down so they can keep you paying high interest. I have a credit one card that is especially bad. I pay all but a few dollars every month but they still charge me tons of interest because they charge it daily; I wasn’t aware of this until a day ago….also, I was a few days late paying (a complete accident, I somehow paid 1 card twice within 3 days, unintentionally), and once I realized the mistake, they had already reported it. I immediately paid it. So now my credit report shows paid on time, but they didn’t update the balance, so now it looks like I’m irresponsible and don’t pay my bills. It’s rigged. It’s designed to keep people like me paying high interest for as long as possible. 1 4 day mistake undid 6 months of progress. When they finally update the balance to reflect reality, they’ll give 10 pts or so….. maybe

  • US Representative Maxine Waters is easily confirmed to be female. A quick check in the Wikipedia article on her identifies her as the most senior of the dozen black women serving in the United States Congress.

    It was an unnecessary dig to refer to her with male pronouns. If intentionally done: have more respect. If in error: attention to details and editing required.

    • Hi there,
      I’m sorry, but I don’t see where you are seeing Rep. Waters referred to with male pronouns in this article. Can you please point it out to me so that I can make the adjustments? Thank you.

  • Taking items off sooner is not going to help the problem. It’s a bandaid to something much bigger. If your going to change the credit system to better help the consumer then do it the right way. Focus more on the items paid then a late payment here and there. It’s awful when you are told time and time again that your credit score would be better if you just filed for bankruptcy instead of fighting to dig your self out of the hole your in. Now that’s a flawed system. Not to mention that it hurts you to take out a loan but also hurts you if you don’t have one and they want you to have credit cards and use them on a regular basis but yet it hurts you if you use them to much. And also how you have had tons of loans and always paid them back in full but wait, you were late 30 days last week on a payment so none of the good you have done matters!! Oh and not to mention they are only going to give you a few points back after you have made regular payments for 3 months but if you are late one time they take 45+! Flawed is not the word I would use. Rigged describes our credit system much better!!

    • Teri truer words where never written. The system is beyond flawed it is one that feeds off of itself and the chaos it creates. do not forget that frequently you are unable to obtain a home modification, approval for a short sale if you are current.

      There is no provision to assist those who have private mortgages and found themselves under water and were forced into short sales , deed in lieu or foreclosures and the banks were not predatory. we did not cause the problems in the banking industry -the industry did .
      How simple it would be to grant immunity to those who were unable to refinance balloons or complete buy outs as a result of divorce/separation or relocation due to job or illness and found that they were completely underwater.
      Consideration should be given to the number of time one pays in advance versus solely on the negatives.
      But I guess we all should remember that the banking information purchases data from the reporting bureaus and based on the information provided they charge interest. So for those attempting to live within their means and despite high utilization regularly make payments that are above the minimum payment are considered a risk and yet these people are expected to continue renting homes that if that cost 25-50% more than if they could purchase the same home.

  • Boy I hope this time rep waters can get this bill passed I have been a victim of the credit bureau for over thirty years. As many of the posts have already mentioned I have been in every situation named . I even wrote a letter to our newly elected President donald j trump before he was elected hoping maybe he could help get things removed from my credit report as mentioned resold collections for over 15 years now. I can’t believe our government would even allow this to happen . the best thing to do would be to do away with the credit bureaus altogether and go back in times to trust each person individually and we would have a stronger nation built on trust. I have not been able to get any kind of credit,not even something as simple as a small credit card.for over twenty years now. Yes I may have made some mistakes in the past but have to pay for them for a lifetime . Cant rent an apartment with a score of 650 or less,no wonder we have so many homeless people on the street.also the fact that the inquiries stay on report for two years if you have too many no good , if too few no good , make up your damn minds. I usually have to wait to save money up for any car repairs, food clothes etc. And then no one will give you any credit because of no credit history to go by. But now if you win the lottery big time there are no reservations as to how the banks credit card org charities can get a hold of your money with they”re offers . All i can say now is “you come into the world with nothing, and most certainly you will go out the same way as long as we have this society of a credit bureau mentality”. This government is truly messed up. Wishing the best for rep waters

  • Why are we pentilized for viewing our own credit report that we own any time we want. This is our information and not owned by anyone else so there should be no problem for us viewing when we want or authorize someone to pull our information when trying get approved fir a purchase.
    I totally agree with the changes for the length of time as things stay on the credit reports way to long. Credit service agencies should be held to a standard of timely removal of a cleared, paid in full outstanding account. Status of limitation should be held to a higher standard and because a debt is sold between collection companies doesn’t and should not let the date of the debt re-start over because of this. All of it is to long and unfair for someone trying to recover from losing a job or medical issue that prevented them from making timely payments or payments at all.
    The folks that developed the credit reporting system and it’s rule more than likely are of the wealthy class and never have been faced with hardships so they just don’t get it.
    There will always be folks that try to cheat at not paying but for the ones that do there best and try to manage there credit accordingly should not ge punished.
    It is ridiculous to let any financial institution charge interest rates up to 400% no matter what. This happens to folk with poor credit scores that are in need of help but can only get assistance thru pay paid loans.

  • You’re full of donkey dust. Are you paid bt the big banks? You’re more concerned for them than the consumer. OK, bump the 45 day window up to 1 year. The point is stop the long term punishment of the consumer for past mistakes. Bankruptcy? Max it at 3 years, You’re so worried about some bad actors taking advantage that you are willing to sacrifice the financial well-being of millions of consumers. Regulations can be made to catch and punish the bad actors. What pisses me off is that the credit card companies are the bad actors. Their interest rates are calculated to cover debt defaults, so monies lost in bankruptcieds are already covered. Then they take tax right-offs for the bogus losseds. Why not help the consumer get such sweetheart deals?

  • I believe the bill has some merit but they should be targeting the collection agencies and their ability to renew old debts that have been settled or expired beyond the limits already in place. Too many times a consumers old debt is sold over and over to collection agencies that renew the debt on a consumer’s credit file to make it look as though it’s an active account. If Congress wants to target and regulate a problem it should be these bottom feeder collection practices.

    • Please read the entire Bill before stating that it doesn’t target the collection agencies. The bill does that and more. When I say read the entire bill, I mean the actual bill, not some parts of it before anyone starts to break it apart, not knowing exactly what it does. You can find it on

  • 7 years for a collection to stay on your report is way too long…it’s almost as long as a bankruptcy. The credit reporting system is deeply flawed. If you pay or settle a collection account, it should be removed from your credit report no later than 30 days after settlement. Remember, it’s up to the collection agency to determine if they even want to settle the account. Sometimes, they’ll only take full payment. Also, I think it’s ridiculous for inquiries to remain on your credit for so long. I think it should be no longer than a year. I hope at least some items from the bill will considered and pass. We are all prisoners of the system.

    • Yes you are right, we are prisoners of this flawed system. This is how the banks can own your life, so we need these reforms, and more down the line to address the collection agencies that are renewing debt just because they acquired it at a discount from the original creditor.

  • I have said all along that once a creditor is paid, they are paid. The current system is too tight and it punishes people far too long. Ten and seven years are far too long. You are actually serving time. Each state has a statute of limitations. My state is three years. That is law, and that is is long enough. I do not feel that inquiries should go against you at all; it’s ridiculous. I support The Honorable Walter’s proposal. Quite frankly, I never liked the scoring system. I can look at my credit report and see my bills are being paid or not. If every day people are going to be held to the grind, then every day people should get million dollar bonuses. We have paid enough, and enough is enough.

  • I think the backlash behind this is, the rich want to stay rich, and keep the poor; poor. Business take advantage of the consumer all the time. It should be a law to have stuff taken off your credit after it has been paid off.

  • How about a credit service reporting agency that rates lender fairness to borrowers? For example, some lenders set payment due dates at 5 pm Eastern time, which is 2 pm Pacific time, a full 10 hours before the calendar changes in America’s most populated state! This trickery often is not discovered until the borrower gets home from work and starts paying a typical batch of bills. Because the transactions are automatically entered on 24-hour computers, there is no just reason for the premature cutoff. It is a predatory practice and should be so noted on the lender’s consumer rating.

  • I truly believe that inquiries stays on your credit report way to long and scores of 600 -640 shouldn’t be considered poor credit.

  • Why is it that you don’t get credit rated for the way you’ve paid your rent on time every month for 15 or 20 years, why don’t you get credit rating for paying your power bill on time Paying your gas bill on time paying your water bill on time your cable bill on time all these are necessity and should count on your credit And Be rated with your credit bureaus just like all of your credit cards which seems to be the only thing that credit bureaus rate you on. This is really unfair.

  • Let’s do some real good here and wipe out the “loopholes” from US Code 1681c , specifically, (1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;
    (2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or
    (3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more. Forgiving student debt is another.

    • What you seem to be describing here is a Racketeer-Influenced Crime Organization: a totally predatory negative credit reporting network of negative credit reporters & companies who ‘hold’ negative computer reports gathered & underwritten for credit reporter borrowing under insurance/re-insurance policies of $150,000. These negative consumer credit companies then are permitted, with some government & court approval, to try to ‘collect on’/extort from forced ‘customers’ with much less ever actually borrowed regardless of repayment.

  • I 100% agree with the propose bill by Walters.It is time for lower class citizens of this country to rise up against the unfair treatment done by creditors and those who have power to destroy your credit.I pray this bill passes..I’m all for it!

  • Creditors should not be allowed to sell your accounts over and over again and they keep resurfacing on your record well past the 7 year period allowed by law forcing you to have to constantly challenge those items, so for that reason, I offer my support to Rep. Waters.

    • I thought this practice was called “parking” and it is not allowed. It is really frustrating, I would check on that if I were you.
      Hope this helps

  • This is an important piece of legislation because it is applicable with my situation. I am a victim of predatory lending and the company (Ocwen Financial Services) has completely destroyed my credit and right now I have no real viable way of correcting my credit or having that stuff removed. This legislation will empower consumers such as myself who have been victimized by such awful business practices of predatory lenders.

    • Hi, L.Anderson..I agree with the new bill..I think people should not have to wait 7 years to be given a second chance..Derogatory paid accounts, whether paid in full or settled should not remain on your credit..

  • And who was that set-up the credit scoring system?? So, let me see. They set-up their own rules? How nice!

  • Also people who were victims of predatory lenders should be able to start fresh all over again and be able to purchase another home

  • Even though I had written documentation that I was not 30-60-90 days late on a loan that was paid off to Wells Fargo auto
    Credit they claimed they had the right to ruin my credit with these negative dings even though I had proof that the loan was paid off and I was already making payments on a new loan. They claimed that processing time to Close the old Loan was not their problem and they even stood firm
    Even With the consumer protection bureau about their right to report my loan late! I had full written proof of everything but a person named Micah Taylor promised to ruin me because I called her a “vicious credit rat” and to this day there are still negative dings on my new loan even though I was never late and had full
    Written documentation! Why is this person allowed to ruin my credit, stalk
    Me on social
    Media and make these claims just because she is in a position of power? I did everything possible
    To have these negative marks removed but Wells Fargo still
    Refuses to remove them! They are the only negative marks on my credit but have kept me from getting any loans or any credit! She is a criminal ! How can this happen???

  • Some women of spousal abuse who had good credit or no credit were used by there spouse under abuse. These persons suffer twice. Once by the hand of abuse who made their credit bad and then by the system who allowed that method to stick!

  • Well, it’s sure refreshing to see an egalitrairian take an important stand on an issue that affects millions. It’s just too darn bad that she was opposed by the financial services industry, from people who have never felt the touch of financial pain. I support her thinking. Nobody in debt needs to be punished too long.

  • I believe it is a pretty good idea. Usually, the debt that is “settled” is because of a dispute from the borrower who feels and sometimes is taken. For one thing, I would bet you there will be a lot LESS use of Bankruptcy because they have another option and I think 45 days to take it off the credit report is plenty. This may help get them some room to re-grip their financial situation and save the companies having the loss. Just take a look at BOTH sides..I think it is a smart move.

  • For too long the middle class has been unfairly “sanctioned” for long ago settled financial strains! The 7 year blotch on credit keeps the poor, poor as it limits job opportunities, jacks up the cost of totally unrelated services such as health and car insurance premiums, and I treat rates on loans from home to car loans. These things increase expenses so much that it makes it more likely that a family would have to default on a loan. It’s as if institutions are judging a persons moral character by a late payment on a credit card!!! It is understandable that for a time, caution should be taken but not to the point that it becomes class warfare. I hope the bill requires public education in the school system to teach kids how the system works!

  • What gives FICO, a privately held entity, the right to access anyone’s personal information and plug it into their profit-making model? If they use potentially incorrect information generated by the credit bureaus, why then can’t they be held liable when consumer privacy is invaded and they don’t have to reach out to consumers to ask permission to use this information or make attempts to correct it? The whole thing is outrageous. FICO makes money selling consumers private information and the consumer gets nothing but abused in the process. The whole thing is a racket.

  • One major change to the system now would be to stop predatory collection companies from billing people that have gone to the hospital. The doctors are in cahoots with collection companies and double-billing patients claiming these doctors are independent contractors (which they are not by federal guidelines of independent contractors) holding a persons credit score hostage for payment.

  • Maxine Waters? Isn’t she under investigation fir fraud in her non profit organization she runs? It is supposed to get needy children pay tuition, but she used it for herself …

  • I do agree with you on the collection piece but disagree on the BK reporting. 10yrs is too long. 7 yrs is fair and will treat all BK the same. CFPB oversight will be difficult at best as you say correctly on two companies have had success.

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