Consumer complaint received 2015-09-14
Company: Experian Information Solutions Inc.
State: NV
Product: Credit reporting
Issue: Incorrect information on credit report
Sub-issue: Account status

Complaint:
There is an outdated medical listed which I do not owe. I have disputed this several times and it is still listed. 
Americans struggling with bad credit because of medical debt will get some relief from redit reporting agencies, a move in stride with leniency planned by top providers of credit scores. 
And consumers who find and report mistakes on their credit reports should soon get better results from credit bureaus, a win for victims of identity theft and credit reporting mistakes '' To call this a big deal is an understatement, '' said XXXX XXXX, credit expert at XXXX. He said it 's the biggest change to credit reporting in more than a decade. 
Credit reports are kept on some XXXX XXXX U.S. consumers. They attempt to document a person 's credit history and form the basis for lenders to decide whether to lend money and extend credit on everything from mortgages and car loans to wireless phone service. They also are the basis for XXXX-digit credit scores that try to predict the probability that a borrower will pay back a loan. 
Consumers with the best credit scores get the best loan terms, such as low interest rates, higher credit limits and lower down-payment requirements. Those with poor scores might not be able to get a loan at all. 
On Monday, the XXXX largest credit-reporting agencies, XXXX, Experian and XXXX, said bad medical debts wo n't be reported until after a 180-day waiting period to allow time for insurance payments to be applied. 

" You want to give the insurance-claims process time to work and get these doctors and service providers paid, and that process can take months in some cases, '' XXXX said. " You do n't want to penalize the consumer because of the insurance process deficiencies, which is essentially what happens today. " More than half of all bad-debt collections on credit reports are associated with medical bills, dwarfing all other categories of collections, according to a study by the Federal Reserve Board. That affects some XXXX XXXX consumers, according to the Consumer Financial Protection Bureau. 

" The really landmark part of this is the medical, '' said XXXX XXXX, chairman and co-founder of XXXX. " There were times when doctors ' offices would report first and ask questions later, which is very negative for consumers. ... As this rolls out, this will solve a lot of the problem. " Some changes are retroactive. For example, existing medical debt defaults that finally get paid -- whether by the insurer or the patient -- will be deleted. That likely will immediately improve a consumer 's credit scores, although by how much can vary widely, XXXX said. 

The move by the credit bureaus jibes with XXXX announced in XXXX by credit score provider FICO, which says its brand of scores is used by 90 percent of U.S. lenders. It said its secret formula for calculating scores would change to reduce the effect of bad medical debts. 

As a result of FICO 's move alone, its median score for consumers whose only major black marks are unpaid medical debts was expected to increase by XXXX points on a scale of XXXX to XXXX, according to FICO. Another major brand of credit scores, XXXX, made a similar move. 

As a practical matter, the six-month grace period actually will be longer, probably seven to nine months, XXXX said. That 's because medical facilities will often wait for payment, not turning over defaults right away to a collection agency. 

Changes by the credit agencies and FICO seem to be a response to the Consumer Financial Protection Bureau, which last year released a research report claiming consumer credit scores are overly penalized for medical debt that goes into collections. 

An unpaid medical bill is different from other unpaid bills, such as those for phone service or utilities, the bureau argued. In some instances, the consumer may not even be aware of a debt s

Company public response: Company chooses not to provide a public response
Company response to consumer: Closed with explanation