At the start of a new year, many consumers make it a habit to get their latest credit report information from the top three credit report companies as consumers are entitled to one free report each year, according to law.

Imagine doing just that to discover there has been a huge mistake, and it's impacting your credit score. This means you may have an issue buying a car, getting lower insurance rates, or be denied on that next credit card application.

The good news is that the top credit card reporting agencies -- Experian, Equifax and TransUnion -- are agreeing to revamp how they handle disputes regarding debt posting and to make the correction process easier, thanks to an agreement between the New York State Attorney General and the companies.

"This is huge," said Chi Chi Wu, an attorney at the National Consumer Law Center. "Consumers should be able to more easily get their errors fixed."

Typically when a consumer decides to dispute a credit report notice, it's up to the consumer to take the lead on getting it fixed. Credit reporting companies then investigate such claims using internal resources. In the past, they have traditionally ruled on the side of the credit card company that reported the late payment activity or debt gone unpaid.

Now, the reporting agencies must hire independent reviewers to investigate and determine if a fix should be made. Consumers are also provided a second free report to ascertain that corrections have been made and reports are up to date following a dispute resolution.

"It's a sea change in the way the credit bureaus treat complaints," said Ed Mierzwinski, consumer program director at advocacy group U.S. PIRG. "The credit bureaus have been run by computers for years now. They're going to have to hire more people and actually verify that what a creditor said is true."

In addition, the new agreement provides the following consumer benefits. Keep in mind the changes won't be in place for at least six months and could take up to 39 months, according to one report:

• The new agreement calls for an extended waiting time on reporting medical debts gone unpaid. Now, the waiting period is 180 days, which state officials say is needed due to the lag time between consumer payments and insurance company payment record keeping.
• Parking tickets and fines such as library late fees will no longer appear on credit reports.