New Credit Reporting Structure for Medical Bills May Help Consumer Credit Scores – Eventually

Medical debt | SettleiTsoft debt settlement App

For lots of people, unexpected medical expenses can turn into an enormous unexpected financial burden.  This is demonstrated by the fact that over half of all debt listed on credit reports is related to medical expenses.  As a result, often consumers find their credit score also suffers.

However, credit reporting agencies are about to change the manner in which they report and evaluate medical.  Hopefully, this will lessen the impact medical expenses will have on credit reports.

Starting Sept. 15, the three major credit reporting agencies – Experian, Equifax and TransUnion – will set a 180-day waiting period before including medical debt on a consumer’s credit report.  The six-month period is intended to provide enough time to resolve disputes with insurers and delays in payment.  In addition, the credit bureaus will remove medical debt from consumers’ credit reports once it’s paid by an insurer.

As opposed to collecting past-due medical bills themselves, hospitals and doctors offices typically engage collection agencies.  But the timing varies as to when providers take that step.

Forty-Three Million Americans Have Medical Debt in Collection That’s Adversely Affecting Their Credit

According to the most recent data found in a 2014 report by the U.S. Consumer Financial Protection Bureau (CFPB), the average amount of medical debt in collection was $579, compared with $1,000 for non-medical debt.  For 15 million consumers, medical debt was the onCredit Report rightly blemish on their credit report, per the CFPB.

This may not be surprising given the growth in the number of people with high-deductible health plans and significant out-of-pocket financial responsibilities for healthcare.  People who typically have good credit are now encumbered with huge bills.

Lenders use credit reports and credit scores to evaluate the risk that someone won’t repay a loan. The credit-scoring companies build algorithms that use the data in people’s credit reports to assign a three-digit credit score. This is typically between 300 and 850, which summarizes someone’s credit risk based on the information in a credit report at that time. Higher scores indicate lower risk.

Credit-scoring companies like FICO and VantageScore that develop these models have been adjusting their formulas to account for the fact that medical debt isn’t necessarily an accurate predictor of whether someone is a good credit risk.

The credit reporting agencies say consumers with medical accounts are less likely to default on these accounts as compared to non-medical accounts.  To address this issue, newer FICO and VantageScore models differentiate between medical and non-medical debt; with medical debt in collections receiving a smaller penalty than those with non-medical collections.  This change can make a difference in people’s credit scores.

Since many financial institutions have not adopted the newer versions of the credit-scoring models, nothing has changed for most consumers.

SettleiTsoft – The Free Debt Settlement App & Online Debt Negotiation Software

SettleiTsoft has encapsulated all aspects of the debt negotiation and settlement process in a unique automated and intuitive system platform. Debtors can validate their creditors and digitally interact, negotiate payment arrangements, and create settlement agreements for any delinquent debts, such as unsecured medical or credit card debt, in a secure virtual environment.

Phone App 3The user is always in control. Therefore, both parties – debtors and creditors – may choose to accept, reject, or make counter-offers to settlement proposals.  Consumers can utilize the Free base digital tools of SettleiTsoft through the web user interface or phone application.  A professional version of the software is available for a nominal fee.

Accessible 24/7 via the Internet or Phone App, SettleiTsoft provides a variety of services – from its powerful financial management tools that will help you develop a livable budget; to its debt settlement capabilities.

In addition, the system has the ability to validate that the creditor is indeed authorized to collect the debt; thereby eliminating scammers who falsely claim the right to collect the consumer’s debt.

That’s Why It is More Important than Ever to Enroll in SettleiTsoft

By utilizing SettleiTsoft, debtors are establishing this convenient and seamless electronic means of communication as their preferred negotiation method. This preference should then stop collection calls from creditors and allow the debt obligation to be amicably resolved.  The software is easy to use with step-by-step instructions and topic-specific videos in every section. Therefore, the consumers can quickly become their own super-efficient debt settlement agents and begin restoring their financial peace of mind.

To learn more about this free debt settlement software platform, its convenient financial management tools, and how it may help anyone with monetary problems, visit

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