Proposed law would improve credit reporting

With California consumers complaining that inaccurate credit reports are costing them higher interest rates on home loans, there’s a new effort in Sacramento to address the problem.

Current state and federal laws require credit reporting bureaus to correct or remove errors in credit files within 30 days. A state Assembly bill introduced by Assemblywoman Christine Kehoe (D-San Diego) would raise the standard of accuracy of information that creditors and credit collection companies provide to these reporting agencies.

Currently, creditors and credit collectors can include information unless there is reason to believe that the data are inaccurate or incomplete. The bill, AB 800, would shift that standard so that the creditors and collectors cannot include information unless they have reason to believe that it is accurate.

If there is a mistake, they must correct it within 30 days. If the error is not corrected, a consumer would, for the first time, be entitled to collect $2,500 or actual damages from the creditor.

Consumers Union and the California Assn. of Realtors are supporting the bill, which is scheduled to be heard Monday by the Assembly Banking and Finance Committee.