Texas residents may be interested in an important change Equifax made to its credit reporting policies. The change may impact thousands of customer's credit scores if they have filed for Chapter 13 bankruptcy.
The reporting change came after ProPublica questioned the credit reporting agency about its policies. Equifax credit scores could be dramatically lower for a certain group of customers compared to Experian or TransUnion. While there is commonly some variation between the agencies, the differences are usually minor. In this case, a person's ability to get credit or apply for housing or assistance could be severely impacted depending on which of the three reports were checked. For example, if a landlord checked the person's TransUnion score, they may be approved, but if that landlord checked the Equifax score instead, the renter would be denied.
The change was caused by how Equifax handled Chapter 13 bankruptcy cases. Normally, Chapter 13 bankruptcies are flagged on credit histories for seven years, whereas Chapter 7 bankruptcies are flagged for 10. Sometimes, a debtor may not complete the Chapter 13 bankruptcy repayment plan, and the case is dismissed. In those cases, Equifax would leave the Chapter 13 bankruptcy on the report for 10 years while the other agencies only kept it for seven.
While Equifax quietly agreed to change its reporting policies to be consistent with the other agencies, many people still have problems with errors or inaccuracies on their credit reports. It can be difficult to get an error or discrepancy removed from a report, and it may be difficult to understand what the error is exactly or how it got there. Bankruptcies have a major impact on credit scores. An attorney may be able to help a client understand the effects of bankruptcy on credit. If there are errors on a credit report, the attorney may help a person understand and correct them.