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Credit reporting agencies making changes regarding medical debt

When a person suffers a medical emergency, they can incur quite a bit in the way of medical bills. When these bills aren't paid on time, it can have a variety of significant financial impacts on a person.

For one, having bad medical debt can have negative effects on a person's credit report. Federal estimates indicate that bad-debt collections related to medical bills make up over half of all the bad-debt collections that are currently on the credit reports of U.S. consumers. When a person gets a bad mark on their credit report in relation to a medical debt, it could have negative impacts on their credit as a whole. Having poor credit can have considerable financial implications. 

Recently, an announcement was made that Experian, TransUnion and Equifax (which are the three biggest credit reporting agencies) will be making some changes to their policies regarding medical debt and credit reports. These changes could have benefits for some individuals who are facing or have faced medical debt struggles. Among the changes are that:

  • The agencies will wait 180 days before putting a bad medical debt on a consumer's credit report.
  • If a bad medical debt is paid off by the consumer or their insurer, the agencies will remove the bad medical debt from the consumer's credit report.

Even with these changes though, medical debt struggles will still have the potential to cause significant problems for a person. For one, the changes only put some limitations on when a bad medical debt will be on a person's credit report, there will still be plenty of circumstances where a bad medical debt can end up in a credit report. Also, credit report problems are only one of the consequences having a bad medical debt can have for a person. 

Thus, when a person is facing medical debt problems, seeking out debt relief help can be wise. Debt relief attorneys can look over the debt situation of a person who has bad medical debt and give them advice as to what debt relief options may be able to help them. 

Source: Chicago Tribune, "Credit bureaus to offer relief to consumers with medical debt," Gregory Karp, March 9, 2015

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