Americans’ credit scores will be better protected if their insurers delay medical payments, under a new deal announced Monday.
More than half of all debt on credit reports is from medical expenses, and while some of that comes from consumers’ unpaid bills, it also results when insurance companies delay payments. And that can hurt consumers’ credit scores and make it harder for them to obtain a loan.
Medical debts won’t be added to credit reports until 180 days have passed in order to allow insurance payments to be taken into account, under a deal hashed out between the state of New York and the country’s three biggest credit-rating agencies: Equifax Information Services LLC, Experian Information Solutions Inc. and TransUnion LLC.
The deal also provides that once insurance pays a debt, that debt will be removed from a consumer’s credit report.
The changes come as part of ramped-up efforts to resolve disputes over errors on state residents’ credit reports. Most of the changes will be implemented over the next three years and will apply around the country.
“The nation’s largest reporting agencies have a responsibility to investigate and correct errors on consumers’ credit reports,” New York Attorney General Eric Schneiderman said. “This agreement will reform the entire industry and provide vital protections for millions of consumers across the country.”
