Medical Debt

The three major credit reporting agencies – Equifax, Experian, and TransUnion – recently agreed to “overhaul” reporting practices regarding medical debt on consumers’ credit reports. These changes include a new six-month waiting period before the agencies can report a consumer’s medical debt on his/her credit report, and they must also remove medical debts from a consumer’s report after the debts are paid by insurance.While the agencies say these changes will be made nationwide over the next three years, the Consumer Data Industry Association – a trade group which represents the “big three” – says most changes will be implemented within the next six to eighteen months.The agencies will also change the ways disputes are handled: they typically outsource thousands of disputes per day to overseas employees who translate the dispute to a two- or three-digit code number and send it (with supporting documentation) to the creditor, and no further investigation occurs if the information is verified by the creditor. Instead of this automation, there will be specially-trained employees who will review consumers’ supporting documentation for cases involving fraud, identity theft, and mixed/merged credit files.In addition to these changes, the three agencies will also conduct media campaigns to explain the changes over the next three years.