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Settlement changes how medical debt is reported by credit bureaus

The costs of medical treatment in Tennessee, and throughout the U.S., are on the rise. Even with health insurance coverage, people may incur medical debt, which could show up on their credit reports. In a December 2014 report, the Consumer Financial Protection Bureau indicated that approximately half of the reported collection tradelines were from medical debt collection efforts. A recent settlement in a dispute involving the three largest credit reporting bureaus, however, will have a significant impact on how medical debt is reported moving forward.  

Medical billing can be slow and wrought with errors. Due to processing times, appeals and other factors, it can take time for insurers to pay. As a result, people’s medical expenses may have appeared on their credit report as debts before they even received a statement from their physicians. Additionally, an insurer may eventually pay expenses that have already appeared on people’s credit reports.

Money.com reports that under the recently reached settlement agreement, Transunion, Equifax and Experian will not add medical debt to your credit reports until after a 180-day waiting period. If a person’s insurance company ultimately pays the debt, then it will be taken off of his or her report. Furthermore, trained employees for the credit bureaus will investigate and review complaints, even if a creditor claims that the information is accurate. The changes will be phased in over a six-month period. They are meant to help avoid erroneous debts from being placed on, and damaging people’s credit reports.

Even with the new reporting methods in place, people may still experience financial struggles as a result of medical debts. Those facing these types of challenges may benefit from discussing their situation with a legal representative. An attorney may advise them of their options, and help them to determine the best course of action for their circumstances.

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