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Changing how medical debt is reported

Debtors in Kentucky may be interested in learning more about major changes to the credit industry that were announced on March 9. All three major credit bureaus have committed to changing the way medical debt is reported and improving how they respond to errors identified by consumer complaints. The New York State Attorney General began investigating the three bureaus in 2012 and was able to negotiate these changes as part of a settlement.

The changes will be implemented across the U.S. The settlement agreement requires the credit bureaus to train and assign employees to investigate and review complaints. In addition, Transunion, Experian and Equifax will now be required to wait at least 180 days before posting medical debt on the consumer's credit report. The changes are designed to grant consumers enough time to actually receive and pay the medical bill. The credit bureaus also agreed to remove medical debt from credit reports immediately after the insurer pays it.

Whenever consumers submit an employment, mortgage, credit card or rental application, the payment history on their credit report is typically reviewed. However, a study published by the Federal Trade Commission estimates that 20 percent of the consumer credit reports contain at least one error. When consumers have been successful after filing a dispute to change the error, over 50 percent reported that they had experienced lingering issues on their credit report.

Consumers who need help with medical debt relief or resolving issues with creditors may benefit from consulting a lawyer. Legal counsel may be prepared to help debtors explore effective strategies for reducing debt and repaying creditors. Lawyers may also be able to help protect debtors from wage garnishment or creditor harassment through bankruptcy as well.

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