Whether you're buying a home or want to purchase new furniture, lenders will take a look at your credit report to determine your credit worthiness. Any mistakes on your report can mean the difference between financing your dreams and getting an embarrassing rejection. Unfortunately, getting mistakes on credit reports fixed has generally been an arduous task. A recent settlement between the New York Attorney General and the three major credit bureaus, however, may fix this and other problems consumers have had dealing with debt reporting.

Streamline Dispute Resolution

The way the credit reporting agencies have handled errors has long been a bone of contention for consumers who had the misfortune of seeing their credit scores tank because of mistakes. About 20 percent of all credit reports contains errors, according the Federal Trade Commission, and the people most affected are those in the lower range who have experienced credit problems

The errors run the gamut from minor issues such as reporting a late payment when the customer always paid on time to major problems such as putting one person's credit information on another similarly named person's report.

However, getting the errors corrected often involves making multiple calls and submitting reams of supporting documentation, and that doesn't always result in an acceptable resolution. For instance, an Oregon woman tried a total of eight times to get her Equifax credit report fixed. After the last attempt, she sued the credit reporting agency and won an $18.6 million damage award for the trouble the company put her through.

To make it easier to dispute errors, the credit reporting agencies have agreed to employ specially trained personnel whose job will be to respond to disputes and work with lenders to fix reporting problems. As of right now, only 15 percent of the disputes are resolved at the agencies. The majority of errors are sent to the creditor to investigate and fix, which doesn't always end well for the consumer.

Medical Debt Waiting Period

Another major change is the way the credit bureaus will handle the reporting of medical debt. Despite the passing of the Affordable Care Act (also known as Obamacare), medical debt is still the number one cause of personal bankruptcy, and about 52 percent of all debt sitting on consumer's credit reports are related to medical expenses. This type of debt impacts about one out of every 5 Americans and will lead many of them to drain their financial resources paying those bills.

Not only can medical debt lead to bankruptcy, it can wreck havoc on a person's credit report and make it even more difficult for the individual to access credit for necessities or obtain housing and jobs. However, the credit reporting agencies have agreed to give consumers a little more leeway when it comes to medical debt.

Instead of posting data about the debt at the time when it's reported by the creditor, the agency will wait 180 days. This will give insurers enough time to issue payments for services or debtors much needed breathing space to pay off the bills. Even if a medical debt makes it to a person's credit report, it will be wiped off once the debt is paid. This will help protect debtors' creditworthiness and possibly provide some incentive for them to prioritize paying off medical expenses, which may represent a win for the healthcare industry.

Eliminating Predators

The new agreement also addresses some of the problems seen in the payday loan industry. Namely, it attempts to eliminate the impact predatory lenders may have on a person's credit and livelihood. The credit reporting agencies have agreed to not list any debts from companies the New York Attorney General's office has labeled as predatory, which may stop some of the abusive lending and collection practices employed by some businesses in the industry.

While it will take awhile for all of the new rules and processes to be put in place, it appears the changes will make life easier for people who are recovering from bankruptcy and other credit challenges. If you are currently struggling with money issues, connect with a bankruptcy attorney who can advise you on your options for dealing with your debt.