Medical Debt Gets a Break in Credit-Report Overhaul

Big 3 agencies agree to revamp system to better address errors, medical bills
By Jenn Gidman,  Newser Staff
Posted Mar 9, 2015 11:39 AM CDT
Medical Debt Gets a Break in Credit-Report Overhaul
Consumer will benefit from the credit-reporting changes regarding medical debt.   (Shutterstock)

Good news for consumers who've had to play the waiting game to pay off medical debt: The three largest credit-reporting agencies in the US are working together to overhaul their systems to take better care of customer issues and the way medical debt is handled, Reuters reports. In a settlement with New York state Attorney General Eric Schneiderman, Experian, Equifax, and TransUnion have agreed that medical debt won't pop up on customers' credit reports until after 180 days—giving customers more time to receive any insurance money that may still be trickling in. And, even if a medical debt ends up landing on one's report anyway, it has to be taken off ASAP once the insurance funds eventually come in and the consumer is able to pay it off. The plan, announced today, will start coming into play over the next six to 39 months, the Wall Street Journal reports.

The medical debt changes are probably the most noteworthy in the settlement, as 52% of all overdue debt on credit reports is medical debt, per the Consumer Financial Protection Bureau. But other changes are also afoot: Trained employees, for instance, will now be on hand to resolve disputes between creditors and consumers. Even if a creditor insists its info is correct, the credit-reporting agency will re-review all documentation anyway; in the past, once the lender said the info was correct, the process stopped there, and the consumer was stuck with that data on his or her credit report, notes the Journal. The changes are "a good sign that the reporting agencies are finally willing to step up their game and respond to the needs of hardworking consumers and their families," Schneiderman said in an emailed statement to the Journal. (Maybe your credit score's been going up—here's why.)

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