US Government considers a new bill to help your credit report
US government is considering a new bill to help consumers' credit reports. The government is expecting that the new bill would prevent medical debts from ruining thousands of consumers' credit scores. Go through this article to know more about this.
US Government plans a new bill
U.S. House of Representatives has passed a new bill to help consumers' credit reports and scores. The new bill or more popularly known as Medical Debt Relief Act was passed by the Senate in the last week of September 2010. The bill was actually introduced in 2009 in the House Financial Services Committee. As per the new bill, it is illegal to include medical bills on credit reports. However, this will be applicable only when those bills have already been paid 45 days before the issue of credit report.
It is reported that credit experts have pushed for this bill. The credit experts have reviewed millions of credit reports and are of the opinion that around 40% of consumers' reports have medical debts on them. According to them, about 12% of those debts have already been repaid. The remaining 88% were not paid.
It is a fact that medical debts affect consumers not only economically but also from a credit stand point. According to a spokesperson of Commonwealth Fund, medical debts have affected around 72 million consumers (from all the classes) in America. Back in 2007, around 28 million consumers were harassed by the collection agencies regarding unpaid medical debts. This figure has increased by a huge extent in the last few years due to recession. It has also been observed that several consumers have been compelled to file bankruptcy due to medical bill problems.
One of the major reasons behind the introduction of the bill is the fact that medical bill collections are disputable and are often erratically reported. Another reason is, medical debts are different from other kinds of debts such as credit cards. This is because the whole medical billing process is too complex to understand. The consumers often complain that they are confused about the whole billing process. The hospital authorities issue bills and they are required to pay them. They don't even the exact amount of the bill. The whole system lacks transparency.
Finally, the new bill would be good news for the consumers who have at least paid the medical bills. When a paid bill will be removed from the consumer's credit report, it will surely help to improve his credit score. Once the credit score gets better, it will be easier for the consumer to qualify for various types of loans at good rates and terms.