doctor listening to dollar signs heart beatThe nation’s three major credit agencies have agreed to change their policies as part of a settlement with the state of New York. The changes, which go into effect over the next six to 39 months, affect credit dispute processes and medical debt reporting.

This settlement will have a nationwide impact for consumers. Read on to learn more about the changes.

Credit Disputes

Under the terms of the settlement, the credit reporting agencies – Equifax, Experian and TransUnion – will be overhauling the way they handle dispute resolution.

Up to this point, when consumers filed disputes regarding information on their credit report, the dispute was converted to a three-digit code that was sent to the credit lender. The information typically wasn’t changed if the lender said that information was accurate.

The new agreement will require credit reporting agencies to hire independent staff to investigate the merit of credit disputes. They’re required to investigate the complaints even if the creditor says the information is correct.

A 2012 study by the FTC found that one in five consumers had an error that was corrected by a credit reporting agency after it was disputed on at least one of their three credit reports. A follow-up report done in 2015 found that most consumers who reported errors still felt that some part of the disputed information was incorrect.

Your credit is involved in so many transactions, including qualifying for a mortgage, and getting approved for credit cards and car loans. Some companies even check your credit during the job application process. It’s important to know what your credit report says about you.

Under the Fair and Accurate Credit Transactions Act, you can get your credit report from each of the major agencies once a year through AnnualCreditReport.com. The credit monitoring service Quizzle will allow you to check your Equifax credit report and score for free every six months. If you see something wrong, Quizzle can even help you start the dispute process.

Medical Debts

According to a 2014 report by the Consumer Financial Protection Bureau, half of all bills that go to collections are medical bills.

Medical bills are often a complex case. Doctors will report the bills as being unpaid while consumers are dealing with their insurance company to try to get payment or reimbursement. For this reason, in August 2014, FICO, the nation’s largest provider of credit scores, announced that it would start weighing medical debt less heavily.

The new agreement takes things a couple of steps further. Credit monitoring agencies can’t put medical debt on a credit report until it’s gone unpaid for at least 180 days. If the bill is paid by the insurance company, the debt must be removed from the credit report no matter how old it is.

Credit disputes and medical debt reporting processes have changed quite a bit, but now you have the lowdown. Still have questions? Leave us a note in the comments.

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This Post Has 5 Comments

  1. I feel I was scammed by my doctor. I went to fulfill the requirements of a free study. The doctor mentioned I would need to also be charged for an office visit. I told the staff my medical insurance has a hefty deductible and they contacted them and they assured me I would only have to pay $20. I paid that bill when it came. A couple months later I was charged $330. I immediately disputed it with a letter. The second time they contacted me I filed a claim on the phone. The third time they called to collect they said my claim was denied. The test was not medically necessary and I assumed it was part of the study. I feel like i’m stuck between a rock and a hard place. Either I lose $330 (or worse a scamming doctor profits) or I negatively effect my credit score. Any ideas on how to handle this? Any help would be greatly appreciated.

    1. That’s a terrible situation, Marisa. I recommend that you speak with a lawyer about this first. This is a very difficult situation, and you’ll likely need legal guidance. Best of luck to you.

  2. Hi
    I have a medical debt of 200 that was reported during the time I was doing a state move, and by the time I realized it was too late. I would have perfect credit if not for this debt. However I was told that since it’s 5 years old if I pay it it would update the date and drop my score even more. If I pay the amount would the new changes apply to me? How will it help those in retrospect

  3. I have a medical bill from Sept 2012 I have religiously paid monthly to the original debtor, not missing one payment. Last month the debt amount appeared on my credit report with no notice given. Can I dispute this?

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