As Michelle Andrews from Kaiser Health News notes, consumers across the nation are unfortunately aware of the fact that their credit can be ruined due to disputes that delay insurer payment or by medicals bills they may not actually owe. However, three of the largest credit reporting agencies recently announced a new policy would likely change this.
TransUnion, Experian, and Equifax announced that there will be a six-month long buffer period, before medical debt can affect credit rating. Furthermore, the agencies announced that when someone does pay off their medical bill, record of the debt will be immediately removed from their credit report.
These agencies worked with the office of the New York Attorney General to produce this agreement in an effort to improve the accuracy of credit reports, as well as simplifying the procedures for disputing errors in the reports.
Michelle Andrews reports that these agencies generate the reports for over 200 million Americans from collecting payment data from banks and other credit agencies. This credit score is used as to determine a person’s likelihood of paying back loans the interest rates they receive, and a number of other things.
A principal at Community Health Advisors in Massachusetts, Mark Rukavina understands how this change will positively affect millions of Americans and will help them have access to much more affordable loans. Now, consumers will not be subject to penalties when they have a medical bill appear on their credit report for years even when this bill becomes fully paid.
Insurance companies also battle with both providers and consumers for several months before actually paying the bill. This half-year window will hopefully provide enough time for the parties to come to an agreement and not negatively affect consumers’ credit.
Andrews notes that medical-related debt represents more than fifty percent of items on credit reports.